In company news this week, G8 Education’s chair Jenny Hutson has announced an exit from the company after five years. Also, Cash Converters is the focus of negative headlines again and while not ideal, is immaterial to its credit profile
G8 Education’s Jenny Hutson steps down as chairperson
Ms Hutson has announced an exit from the company after five years
G8 Education chairperson Jenny Hutson has announced she will step down from the board on 15 October to be replaced by non-executive director Matthew Reynolds as acting chairman. While Ms Hutson has denied any link, this development has come after G8’s takeover bid for Affinity Education was trumped by an offer from private equity firm Anchorage Capital Partners.
G8's bid was also the subject of some controversy after intervention by the Takeovers Panel due to oddly timed buying of Affinity shares by investors that had historic links to Ms Hutson. The Takeovers Panel ordered that one of the investors, West Bridge, could only sell its shares on market for a higher price than G8's offer. The order effectively quashed West Bridge's ability to sell Affinity shares to G8.
Payday Lending - negative news flow the norm for the sector
Cash Converters is the focus of negative headlines again and while not ideal, is immaterial to CCV’s credit profile
Cash Converters (CCV) has been in the headlines again with the Consumer Action Law Centre (CALC) bringing a case to the Federal Circuit Court on behalf of a single client for an amount of $4,927, alleging that the company failed in its obligation to lend responsibly.
Given the industry has been prone to negative press in recent months, and CCV is market leader, we expect there will be continual ‘noise’ in in relation to this issuer. The main point to note is that, from a credit perspective, while not ideal, the majority of this will be immaterial to CCV’s credit profile.
In relation to this matter, CCV’s subsequently issued a rather scathing ASX release attacking the CALC for taking a c$5k matter to the federal court, compounded by the fact it had not exhausted other options including dispute resolution by the independent credit ombudsman and other options under the Consumer Credit Provision. CCV also made the point that CALC’s claim that the “Payday lending reforms from 2013 have failed” is alarmist given only $288 of the $4,927 was made after 1 July 2013 when the reforms were implemented.
CCV’s response to CALC’s press release can be viewed here.
CALC press release can be viewed here .
Please see below for a link to last week’s update on CCV’s key credit issues.