Amazing Loans Secures Funding
Sydney Morning Herald
Monday May 5, 2008
THE US financier that recently came to the rescue of the troubled Brisbane property group City Pacific has provided a $100 million loan to the high interest lender of the last resort, Amazing Loans.
Amazing Loans has confirmed it obtained the three-year loan from Fortress Credit Corporation.The company, whose shares have plunged 75 per cent in the past year and which burned through $6.1 million of cash in the March quarter, said the loan would help it expand its business.Amazing Loans, whose shares last traded at 12c, is expected to come off a trading halt this morning."The facility provides a solid foundation for expansion of the business," said Amazing Loan's executive chairman, Paul Mathieson. "Our company has come a long way in two years to have the scale required for a $100 million facility, and we look forward to our new phase of growth." Amazing Loans, which charges up to 39.9 per cent for its personal loans, failed to say how much interest it would have to pay on the Fortress loan.Fortress recently provided a $100 million loan to City Pacific's First Mortgage Fund, which recently froze redemptions to its unitholders. Fortress also provided short-term financing to the stricken Gold Coast property concern Octaviar, formerly MFS.Amazing Loans boasted that the new loan marked the two-year anniversary of its listing, but made no mention of its recent share price slide and failure to generate a profit.Its shares were initially suspended from trading in late February after it failed to lodge its half-year results on time. In mid-March it filed its papers - which reported a $4.5 million half-year loss - allowing the stock to resume trading.At the time the company's auditor Ernst & Young said in the results that there was "significant uncertainty" whether the company could continue as a going concern. The new loan will cancel a $15 million, 10 per cent interest facility the company has with Ron Medic Properties due for repayment in November.According to the half-year result, the company had $35 million of short-term borrowings, including the Ron Medic facility, on December 31. It cancelled an additional $20 million loan by acquiring the lender of the facility, Investment Evolution, via a scrip takeover in March.
© 2008 Sydney Morning Herald