RHG Mortgage Corporation Limited looks set to reenter mortgage lending having raised its full-year profit guidance by $10 million after settling two court disputes that could have otherwise threatened the former non-bank lender.
The court settlement was in relation to disputes regarding a claim by German bank UniCredit that RHG had been in default on $324 million in funding provided by it. The claim triggered cross-defaults with other warehouse facilities totalling $2.56 billion.
The claims, if successful, could have ultimately jeopardised a third of RHG’s lending facilities, according to The Australian Financial Review.
But RHG, previously RAMS, told investors yesterday that the various actions in the NSW Supreme Court had been ''commercially'' resolved in the best interest of shareholders in a move that will immediately benefit the company's bottom line.
RAMS was founded in 1991 and expanded from being solely a provider of funds to establish its own retail origination business.
In November 2007 RHG was created when the RAMS brand and franchise network was sold to Westpac. As part of the agreement RHG was prohibited from originating new loans for three years until November 2010.
It is widely expected that RHG will relaunch itself as a mortgage broker after November this year or otherwise look to buy a loan provider next year.
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