PRG agrees to sell finance business to GE Money NZ

By NZPA

Thursday 17th November 2005

Pacific Retail Group (PRG) has agreed to sell its finance business to GE Money New Zealand for $145 million.

The Group will post a $75 million profit from the sale.

Chairman Jock Irvine said PRG will use the proceeds to retire parent company debt, leaving it in a strong position to fund growth in major operating businesses and investigate new investment opportunities.

GE Money New Zealand managing director Jim Cock said the acquisition was an "excellent fit" for his company.

"We expect NZ consumers to be the biggest winners from this acquisition as we can provide a broader range of innovative products through larger distribution networks," Cock said.

At its August 30 annual meeting, PRG said it had whittled down a short list of potential buyers to one preferred bidder.

It had expected an announcement to follow in early September.

Irvine said directors believed they have achieved a fair price for the finance business, as determined by the contestable bidding process and advisors Macquarie New Zealand Limited.

"The sale is in line with PRG's strategic approach, honed during the last year as PRG completed its full transition to an investment company focused on the consumer sector," he said.

The sale is conditional of regulatory and shareholder approvals, as well as third party consents.

GE Finance and Insurance has completed due diligence requirements and, allowing for approvals, settlement is expected on 31 December.

The finance business accounts for $577.7 million of PRG's $840.8 million managed assets.

It comprises Pacific Retail Services, Pacific Retail Finance, Montreal Financial Services and Simply Insurance. Products include personal loans, hire purchase contracts and credit insurance.

In the year to March 31, PRG finance recorded a net profit of $24.5 million on gross revenue of $113.5 million.

GE Money New Zealand is part of the GE Consumer Finance group - a business unit of General Electric Company - and provider of credit services in 47 countries,

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