It makes loans to allow people to finance an auto purchase. Buying that allows PSEC to expand its consumer loan business -- similar, but different than First Tower. Likely the plan was to put it into a seperate holding company and leverage it. I seriously doubt that NICK is losing money. However, now that PSEC's pps is down, the terms of the initial agreement may not be apealing to NICK stock holders. I would agree to purchase it at the initial terms; I would not agree to increase the price 10% or more becasue PSEC's pps is down. (We will get our chance to vote, if it goes that far.)
Personally, I would not worry about it. From what PSEC already stated about consolidation of its holding companies, PSEC could do better by expanding its multi-family portfolio. And now that they are unable to issue more stock, I'm expecting them to adjust the existing portfolio.