The Warehouse to offload financial services division for $18m

CHRISTEL YARDLEY/STUFF

The Warehouse placed it shares in a trading halt ahead of the announcement of a deal with SBS Bank.

The Warehouse has reached a conditional agreement to sell its financial services business to SBS Bank for $18 million.

The retailer warned the deal was likely to result in a $16m write-down when it posts its annual result on September 22.

The Warehouse had placed its shares in a trading halt on Monday morning, ahead of the announcement.

Subject to the finalisation of documentation over the next five weeks, its financial services business would become part of SBS Bank subsidiary Finance Now, it said. 

READ MORE: The Warehouse Group looks to digital future after profit drop

The Warehouse said the sale would extend “an existing positive working relationship between The Warehouse and Finance Now”, whose services The Warehouse would continue to sell under its own brand.

“This transaction will enable [The Warehouse] to focus its capital and people resources on the transformation of its retail business which is our current top priority and will remain so over the next few years,” chairman Joan Withers said. 

The sale would not include Diners Club New Zealand, the company said in a statement to the NZX.

“Final details are yet to be confirmed, however the purchase price of $18m, subject to asset-based adjustments, is expected to result in a non-cash impairment of software assets of approximately $16m in the 2017 financial results.”

More details would be provided when the deal was finalised, it said.

The Warehouse had placed its shares on a trading halt ahead of the announcement.

Shares in the company rose by 13 cents to a three-month high of $2.23 last week.

 


 – Stuff

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