Otago Daily Times

Brand am­bas­sador only af­ter Mike Pero re­signs

- TAMSYN PARKER Business · Oceania News · Investing · Wellington, New Zealand · New Zealand · Switzerland · New Zealand Exchange · Credit Suisse Group · James Boyle · Companies Office

WELLINGTON: Mike Pero Mort­gages seems set to re­turn to pub­lic own­er­ship through the list­ing of its par­ent com­pany, Lib­erty Fi­nan­cial, on the ASX.

Mike Pero Mort­gages was delisted from the NZX in 2006 af­ter a takeover by a joint ven­ture com­pany owned by New Zealand Fi­nance Hold­ings and Lib­erty, an Aus­tralian lender.

The takeover was done at $1.10 a share. Four­teen years on, Lib­erty now owns 100% of Mike Pero Group, which in­cludes its mort­gage, in­sur­ance, fi­nance and real es­tate busi­nesses.

Ac­cord­ing to Aus­tralian me­dia re­ports, Lib­erty is seek­ing to un­der­take an ini­tial pub­lic of­fer that would value the com­pany at $A1.8 bil­lion ($NZ1.9 bil­lion).

It is ex­pected to raise $A363 mil­lion in an IPO priced at 11 times the lender’s forecast net profit af­ter tax, with new in­vestors own­ing 20% of the com­pany on list­ing, ac­cord­ing to the Aus­tralian Fi­nan­cial Re­view.

Lib­erty was founded by now US­based Sher­man Ma in 1997, af­ter he worked at Credit Suisse and McKin­sey & Com­pany. He re­mains an ex­ec­u­tive director, with James Boyle as CEO.

The Aus­tralian re­ported that Lib­erty’s cash net profit in 2020­21 was ex­pected to be $A160 mil­lion to $A170 mil­lion. Its New Zealand busi­ness is just a small part of that.

Fi­nan­cial ac­counts for Mike Pero Group show it made an af­ter­tax profit of $6.533 mil­lion for the year to June 30, down from $8.936 mil­lion.

Its op­er­at­ing in­com­ing rose from $59.4 mil­lion to $65.6 mil­lion but its ex­penses also rose from $49 mil­lion to $57 mil­lion, af­ter a jump in its fi­nance costs driven largely by higher fees and com­mis­sions.

Its pro­vi­sions for im­pair­ment also rose from $1.7 mil­lion to $2.48 mil­lion over the year.

An­a­lysts are bound to be look­ing closely at im­pair­ment pro­vi­sions across the whole busi­ness to see how it has fared un­der Covid­19.

Mike Pero, the man, has ex­ited his own­er­ship of the real es­tate busi­ness which still bears his name.

Com­pa­nies Of­fice records show Mr Pero re­signed as a director of Mike Pero Real Es­tate on October 20 and his com­pany, MPZ One, ended its own­er­ship of the busi­ness on Novem­ber 4.

His com­pany had a 12% stake as of June 30, which had al­ready re­duced from 24% the year be­fore.

In 2018, he re­duced his stake from 50% to 24% af­ter reach­ing a set­tle­ment agree­ment with Mike Pero Mort­gages af­ter a lon­grun­ning le­gal dis­pute.

The set­tle­ment was reached dur­ing the fi­nal stages of a High Court case in which Mike Pero Mort­gages at­tempted to claw back $2.2 mil­lion (or $2.4 mil­lion with in­ter­est) it said Mike Pero over­paid him­self.

As part of the deal, Mr Pero also agreed to take an ac­tive role in pro­mot­ing the broader group un­til at least 2027.

A spokes­woman for Mike Pero Group con­firmed Mr Pero still worked with the com­pany as a brand am­bas­sador. — The New Zealand Her­ald

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