CURO Completes Sale of Canadian Business, Flexiti, to Questrade
Yesterday, in an SEC filing, CURO Group Holdings Corp. CURO revealed that on Aug 31, its wholly-owned subsidiary, CURO Intermediate Holdings, completed the sale of all of the issued and outstanding equity interests of its Canadian point-of-sale business, FLX Holding Corp. (“Flexiti”), to Questrade Financial Group Inc.
At closing, nearly C$39 million of net proceeds (inclusive of adjustments for escrow and holdbacks) were received after the deal and transaction costs.
Per the terms of the deal, CURO expects to receive C$25-C$30 million in late 2023 and up to C$4 million in subsequent periods, subject to adjustments.
CURO provided an updated outlook for the third quarter of 2023 to reflect the removal of Flexiti.
The company expects third-quarter revenues of $165-$170 million.
End-of-period receivables are projected to be $1.23-$1.28 billion.
The company expects the net charge-off ratio to be 17-19.5%. Operating expenses are projected in the range of $90 and $100 million.
Last month, CURO’s subsidiary, Heights Finance Holding Co., was sued by the U.S. Consumer Financial Protection Bureau for allegedly pushing low-income borrowers to refinance short-term loans. The practice placed nearly 10,000 borrowers in continuous debt between 2013 and 2020.
The lawsuit, filed in federal court in Greenville, SC, stated that Heights Finance violated laws against unfair and abusive lending practices by churning loans through repeated refinancing.
However, CURO denied the allegations and will vigorously defend its business practices.
Over the past six months, shares of CURO have lost 54% compared with the industry’s decline of 2.8%.
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Currently, CURO carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Divestitures by Other Finance Firms
A few days ago, Standard Chartered PLC SCBFF announced that it entered into definitive agreements to sell its global aviation finance leasing business to Aircraft Leasing Company (AviLease), owned by Saudi Arabia's Public Investment Fund. The news came after Standard Chartered announced in January 2023 that it was exploring options for the future ownership of its global aviation finance business.
AviLease provides leasing, trading and asset management services and aims to expand rapidly to become one of the top 10 leasing companies in the world as part of its business strategy.
Standard Chartered is expected to enhance its capital position through the sale, providing scope to continue focusing efforts on areas where it is most differentiated.
Similarly, to progress toward achieving targets outlined at Investor Day, The Goldman Sachs Group, Inc. GS entered into an agreement to divest its Personal Financial Management (“PFM”) unit to the leading registered investment advisor, Creative Planning. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.
Goldman Sachs Asset Management will continue to provide investment solutions and services to Creative Planning’s wealth management teams as it continues to build a premier investment management platform.
GS acquired the PFM unit, which was formerly known as United Capital Financial Partners, Inc., in an all-cash deal valued at $750 million in 2019. At the time of the acquisition, it had $25 billion of assets under management.
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