Australian mortgage lender RAMS Home Loan Group has announced a restructuring of its business, with the sale of its brand name and its distribution business to Westpac Banking Corporation for A$140 million.
In addition, Westpac will provide up to A$2 billion of financing to fund new business and to refinance a proportion of RAMS Home Loan Group’s (RHG)outstanding US extendible commercial paper program.
Subject to RHG’s shareholder approval and the terms of the agreement, the sale is expected to complete in January 2008.
RHG chairman John Kinghorn said: The RHG board unanimously believes that in the absence of a superior offer, the Westpac offer represents the best outcome for RHG shareholders. This restructuring provides for the RAMS brand and distribution business to continue, under Westpac’s control.
RHG said that it is not anticipating any redundancies for staff, as it expects that existing staff will either move to Westpac with the sale or be retained by RHG. RHG CEO Greg Kolivos will be retained by Westpac to oversee the transition.