Resimac CEO Scott McWilliam
It appears that Andrew Abercrombie was not alone in his fervent buying of humm scrip in the last month.
Banking Day has learned through several sources that alternative non-bank lender, Resimac, was also an active buyer of humm shares in recent weeks.
Resimac, which markets asset finance to small businesses, mortgages and car finance, is believed to be holding up to 3 per cent of humm’s issued scrip following an intense buying spree that started in the first week of June.
It is understood that Resimac wanted to leverage a strategic stake in the battle over humm’s consumer finance business to enhance a potential play for humm’s commercial finance business, with A$1 billion in assets.
Abercrombie, the founder of the humm business, this month waged a concerted public battle against his board over the planned sale of the consumer finance division to Latitude Financial.
The board, which is currently chaired by Christine Christian, binned the sale deal after it became apparent that Abercrombie had enough support to kill the proposal at a shareholder vote.
The buying activities of Resimac have gone under the radar throughout the humm imbroglio because the company did not hit the ASX’s 5 per cent shareholding trigger for mandatory disclosure.
In May another listed finance company, the Thorn Group, announced that it had acquired $1.85 million worth of humm shares.
While Resimac is probably best known as a specialist distributor of alternative mortgages, in the last year it has been building a commercial finance capability through acquisition.
In January 2021 Resimac moved to full ownership of International Acceptance Group, a Sydney-based finance company involved in asset finance and business lending.
That was followed in July by a beach-head investment in Sonder Equipment Finance, which operates a national commercial broker network.
Resimac executive Michael Moloney told Banking Day’s John Kavanagh last year that the company expected to move to full ownership of Sonder by 2026.
It is unclear whether Resimac’s attempt to pinch-hit in to the humm board feud will yield a fruitful strategic outcome for the company’s ambitious executive team led by chief executive, Scott McWilliam.
The future composition of the humm board appears up in the air following the collapse of the deal with Latitude.
In the short term, at least, Resimac seems likely to be wearing paper losses from its humm buying spree.
Although humm stock closed up 5 per cent to 52.5 cents on Tuesday, the share price is still trading at a big discount to the closing trade of 81 cents on 3 June.
Daily turnover of the stock continues to be higher than average despite the apparent resolution of the board feud in Abercrombie’s favour.
Around 4.8 million shares changed hands on Tuesday.
The average daily turnover for humm scrip this year is 1.7 million.
Christine Christian, the humm chair, yesterday sent an emotional letter to shareholders in the wake of the demise of its recommendation of the Latitude offer.
“I want to assure you that the majority directors have acted in the best interests of shareholders at all times and sought to improve shareholder value, which has diminished substantially in this company over the past 10 years,” Christian wrote.
Finance industry sources told Banking Day on Tuesday that the next instalment in the humm saga could hang on the company’s compliance with loan covenants.
humm relies on several funding lines to support its finance businesses.
Given the sharp fall in the share price this year, there is some concern among investors that humm might need to undertake a capital raising to appease its lead funder – Citibank.