Mariner Financial has entered into a conditional contract for the sale of Mariner Credit Corporation (MCCL) to Pentagon Properties Group, a subsidiary of 360 Capital Group.
The total purchase consideration is $3.7 million which includes Pentagon's acquisition of Mariner Lifestyle Bonds held by Mariner.
The contract is subject to a number of conditions. These include the transfer of payment of Mariner's $7.1 million loan via the restructure of the capital in MCCL, the novation of Mariner Retirement Solution's $1.3 million loan to Pentagon, and the transfer or repayment of the current loan to the Solutions Investment Group Trust (SIGT).
Following completion of the transaction, MCCL is expected to have paid around $5 million, with balance sheets comprising around $10.3 million in cash, $1 million in A-REIT [Real Estate Investment Trust] investments and $1.3 million in loan assets.
"With the acquisition of the SIGT loan, Mariner Financial will acquire a strong cash flow asset which is expected to pay in excess of $4 million over the next two years, which effectively further deleverages its balance sheet," Mariner's managing director Bill Ireland said.
360 Capital/Pentagon will use its funds management and property investment expertise to add value where it can for MCCL's bondholders, according to 360 Capital Group managing director Tony Pitt.
"We will look at rebalancing the A-REIT portfolio and when appropriate will invest excess cash into a diversified portfolio of A-REITs," he said.
Upon completion of the transaction, MCCL will change its name to Pentagon Capital Limited.
In September 2008, Mariner Financial reported a net loss of more than $65 million year-to-date and started to sell off its operations to meet its debt obligations.
