Latitude leaps on long-awaited ASX debut

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This was published 2 years ago

Latitude leaps on long-awaited ASX debut

By Colin Kruger

Ahmed Fahour-led Latitude Financial hit the ground running on its long-awaited ASX debut, climbing by as much as 15 per cent on its third attempt at a public listing.

The non-bank lender rose to a peak of $2.99, well above its IPO price of $2.60, as soon as it landed on the ASX on Tuesday, momentarily boosting its market capitalisation to almost $3 billion.

It drifted lower for the rest of the session, closing at $2.70, a gain of 3.9 per cent.

Latitude Financial chairman Mike Tilley with managing director Ahmed Fahour at the company’s ASX debut on Tuesday.

Latitude Financial chairman Mike Tilley with managing director Ahmed Fahour at the company’s ASX debut on Tuesday. Credit: Eamon Gallagher

It may have been the biggest IPO by market capitalisation on the ASX this year, but Latitude’s latest raising was vastly scaled back compared to the $3.2 billion listing it had planned in 2019, which was abandoned at the eleventh hour.

This time Latitude raised $200 million from fresh investors ahead of the IPO, and a further $280 million from strategic investor Shinsei Bank.

Chairman Mike Tilley said Latitude would work hard to ensure its new shareholders were rewarded for their faith in the company.

“We look forward to the benefits that come from having access to public equity capital markets, buoyed by the tremendous support from investors during our initial offer.”

Latitude offered limited guidance ahead of the IPO in its prospectus but Mr Fahour, who is the managing director, said the company was highly profitable and performing strongly as the economy recovers.

“With the ASX listing we are well placed to leverage our scale, the strength of our many high-performing retail partners and pursue further growth in Australia and New Zealand, as well as new markets.”

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Latitude’s prospectus said loan volume and average gross receivables (AGR) are expected to recover to 2018-19 levels in the second half of 2020-21 as confidence returns to the consumer market.

The board is proposing to pay between 60 and 70 per cent of cash profits as a dividend and intends to declare a dividend of 7.85¢ a share for the half-year ending June 30.

The IPO was underwritten by Bank of America Securities, Credit Suisse and Jefferies. Latitude’s owners KKR, Varde Partners and Deutsche Bank will retain a 66.4 per cent stake after listing, with their shares subject to escrow.

Varde Partners, Deutsche Bank and US private equity giant KKR created Latitude in 2015 after they bought GE Capital Finance for $8.2 billion, including debt.

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