(27 May 2008 – Australia) GE Money has indicated that it is looking at options for Wizard Home Loans, including the option to sell the business.While it is believed that GE will announce their intentions to sell, the company said that it was considering its options, which it said could include a strategic partnership, joint venture or sale.
Mike Cutter, chief executive officer of GE Money Australia & New Zealand, denied the business would go in a fire sale, despite attempting a restructure in the middle of a home loan market struggling with high interest rates.
The tighter credit policies imposed because of the global credit crisis, combined with high interest rates, have triggered the collapse or sale of some branches.
In the four years since GE Money bought Wizard it has lost at least 30 branches, despite its intent to expand the network.
Cutter said that the company believes that there has been a significant amount of equity built over the four years that GE has owned the business, so would be looking to gain a return on their investment.
Wizard was bought by GE Money for an estimated A$500 million with Australian Financial Investments Group.
A different ownership structure will allow GE Money to make the best use of capital and focus on higher returning segments that better leverage core strengths, Cutter added.
Wizard Home Loans founder Mark Bouris, currently Chairman of the company, said that he would consider purchasing the company back if an interested part sought his participation.