Mortgages plc has sold a majority shareholding to Majestic Acquisitions Ltd, a company financed by the Japanese investment company Nikko Principal Investments Ltd. The transaction, with a value of about £40m, includes a financial commitment to fund Mortgages plc’s growth plans.
The additional capital being introduced by Nikko will enable the firm to forge ahead with its plans.
Nikko has introduced a substantial amount of working capital to the business, enabling Mortgages plc to achieve its strategic objectives, grow organically and compete far more aggressively in the market.
Trevor Pothecary, Mortgages plc’s chief executive, said: “We would like to get up to £600m plus from where we are now, which is £350m to £400m a year. That also requires capital investment into systems, technology and human resources.”
The company has plans to grow out of the sub-prime sector and compete with companies such as GMAC-RFC and Sun Bank.
Pothecary said: “At the moment, we are a sub-prime lender, but we are looking to develop a range of non-conforming products, which will enlarge our overall range.”
The existing management team will remain. However, the company’s sales and marketing director, Paul Howard, has taken a new position as sales and development director at rival lender Sun Bank, since the sale was announced.
