Marac Finance's $70 million cash purchase of vehicle financier GMAC New Zealand Ltd is a step towards its goal of becoming a partner in a new South Island-based "Heartland" bank.
The Marac deal, to acquire GMAC's motor-vehicle financing book, including secured loan receivables, finance leases and operating leases, would "enhance" Marac's targeted market of New Zealand families and small to medium businesses, managing director Jeff Greenslade said.
"It is a clear fit with our strategic direction, our proposed merger with Canterbury Building Society and Southern Cross Building Society, and our banking aspirations," he said in a statement this week.
Marac, a subsidiary of listed Pyne Gould Corporation, Canterbury Building Society and the Southern Cross Building Society, announced early last month the proposal to establish and float a "Heartland" bank - drawing together almost 70,000 customers and assets of more than $2 billion.
Marac would assume "the rewards and risks of ownership" of GMAC's financing book from May 31, which subject to completion conditions would be finalised by the end of the month.
Craigs Investment Partners broker Peter McIntyre welcomed the announcement, saying it was "positive" for Marac, in that it was expanding following the collapse of others in the finance company sector and was operating under a regime of new "stringent" Reserve Bank regulations.
Marac general manager of personal finance business Chris Flood said the purchase would "significantly expand" its presence in motor vehicle financing, one of Marac's core business areas.
• Parties involved in the heartland trio proposal are to complete due diligence by the end of the year, begin trading in early 2011, with a banking application to be made mid-year. About 70 branches nationwide with 360 staff are proposed.
