Home Capital Group Inc. Update on Berkshire Hathaway Inc.’s Ownership Interest
TORONTO--(BUSINESS WIRE)--Dec 19, 2018--Home Capital Group Inc. (“Home Capital” or the “Company”) (TSX:HCG) announced today that, following the completion of its Substantial Issuer Bid on Friday December 21 st, 2018, the percentage ownership of Home Capital by Columbia Insurance Company, a wholly-owned subsidiary of Berkshire Hathaway Inc. (“Berkshire”) is projected to be less than 10%.
Warren E. Buffett, Berkshire Chairman and Chief Executive Officer, stated: “We are delighted to see Home Capital back on its feet with healthy liquidity and a solid capital position. In June of 2017, when some were questioning Home’s staying power, Berkshire agreed to lend the Company $2 billion. The team at Home was a pleasure to deal with and have worked to thoughtfully strengthen Home over the last 18 months. As part of the loan commitment Berkshire also committed to provide $400 million of equity financing to Home – $153 million with the funding of the credit line and an additional $247 million contingent upon shareholder approval; shareholders did not approve the additional investment and, as a result (coupled with a full repayment of Berkshire’s credit line) Berkshire’s investment in Home is now not of a size to justify our ongoing involvement. Although we have decided to substantially exit from our investment, we will continue to cheer from the sidelines for our friends at Home.”
Home Capital’s President and Chief Executive Officer, Yousry Bissada, remarked: “Following the successful completion of our Substantial Issuer Bid, Home Capital is in an excellent position to continue providing industry-leading service with a strong focus on sustainable risk management. Berkshire’s investment in Home Capital provided substantive assistance to the Company and created stability and value for the Company and its stakeholders at a critical time in 2017. Since that time, Home Capital has returned to profitability, strengthened its business and made significant progress on its strategy for sustainable growth. Home Capital is grateful to Berkshire for their support while we positioned the Company for long-term success.”
Caution Regarding Forward Looking Statements
This press release contains forward-looking information within the meaning of applicable Canadian securities legislation, including relating to the Company’s completion of a substantial issuer bid and the size of the substantial issuer bid. Please refer to Home Capital’s 2017 Annual Report, available on Home Capital’s website at , and on the Canadian Securities Administrators’ website at , for Home Capital’s Caution Regarding Forward-looking Statements.
About Home Capital and Home Trust
Home Capital Group Inc. is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company (“Home Trust”). Home Trust is a federally regulated trust company offering residential and non-residential mortgage lending, securitization of insured residential mortgage products, consumer lending and credit card services. In addition, Home Trust offers deposits via brokers and financial planners, and through a direct to consumer deposit brand, Oaken Financial. Home Trust also conducts business through its wholly owned subsidiary, Home Bank. Licensed to conduct business across Canada, we have offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.
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CONTACT: Jill MacRae
Director, Investor Relations
KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE
SOURCE: Home Capital Group Inc.
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PUB: 12/19/2018 07:10 AM/DISC: 12/19/2018 07:10 AM