Ann: CLH ASX Release, page-9

Yeah new regs and higher CODB do favour big players, but CCP is better again in that it has a structural advantage via a portfolio approach where it can deploy capital in lending and/or other markets and resist overpaying for PDLs.

Some key quotes from the AFR today regarding the purchase if you haven't seen already?

CLH Purchase:

“It’s an opportunity to expand considerably and add to our profits in future years,” Credit Corp chief executive Thomas Beregi told The Australian Financial Review.

Mr Beregi said the acquisition allowed Credit Corp to acquire client relationships in the agency arena, with major Collection House customers indicating their intention to remain.

“We’ve got people out there every day doing business development, trying to win those relationships,” he said. “This short circuits some of that.”

The sources also said the deal would not need Australian Competition and Consumer Commission approval, with Credit Corp earning a far larger portion of profits from buying slabs of debt outright from institutions such as credit card providers, rather than the remaining agency collections business.

Collection House has almost 730 staff, and Credit Corp’s Mr Beregi said the overwhelming majority would remain.

Risks to the acquisition include ensuring the merger progresses smoothly and clients are not lost, Mr Beregi said.

The acquisition would not change current profit guidance of between $90 million and $97 million for the year, Mr Beregi said.

ASIC:

Mr Beregi said there was always a possibility that some clients might form a negative view depending on ASIC’s ultimate actions. But Credit Corp was trying to be transparent about the problems and had tried to do the right thing, he said.

“Importantly on the issue [with ASIC] our position is that there is no contravention of any law,” he said.