When debt goes unpaid for too long, even banks and major financial institutions need to get some help on board. That’s when financial services like Pioneer (ASX: PNC) come to the fore, promising to recover that debt while keeping customers’ financial needs in mind.
Australian debt recovery specialist Pioneer has acquired a Debt Portfolio from debt purchasing and collection company Panthera Finance for $24.1 million. This acquisition was partially financed through a financial facility provided by Nomura Australia.
As a result of the Panthera transaction, Pioneer has revised its FY24 PDP Investment Guidance to $85 million, up from the previous $60 million. Additionally, Pioneer is actively working on refinancing its current senior debt facility.
Pioneer’s Managing Director Keith John said, “We have spoken for some time about Pioneer’s preferred positioning in the Australian market and how this is generating material PDP investment opportunities. The Panthera transaction demonstrates our ability to realise these opportunities. We very much look forward to completing more one-off material PDP transactions over the balance of FY24 and beyond.”
Pioneer helps Australians facing financial difficulties by managing debt issues. When people struggle to make payments, banks may transfer their accounts to services like Pioneer, which then assists customers in navigating these challenges.
Since 2008, Pioneer has invested over $660 million in managing debt portfolios (PDPs), totalling $4.6 billion across approximately 570,000 customer accounts. The recent acquisition involves about 32,775 customer accounts, mainly credit card and personal loan accounts from the Commonwealth Bank of Australia, with a total value of $367 million.
Pioneer secured a finance facility with Nomura Australia Limited to fund this acquisition through a Special Purpose Vehicle (SPV). Pioneer will use $17 million from the Nomura Finance Facility, and the rest of the funding will come from equity.
The Nomura Facility offers more favourable terms than Pioneer’s existing debt facilities. The PDP acquired from Panthera will be placed in the SPV, separate from the Group’s existing assets, ensuring no impact on Pioneer’s assets or equity.
The financials of this Special Purpose Vehicle (SPV) will be integrated into the Company’s financial statements. The remaining amount from the Nomura Facility can be used for other Purchased Debt Portfolio (PDP) investments, provided they meet specified acceptance criteria as agreed upon with Pioneer.
In Q1 FY24, cash collections stayed around $30 million, similar to Q1 FY23. Pioneer outlined its FY24 plans, highlighting agreements with 12 vendors. The Company also set an executive target for FY26, aiming for a minimum Statutory NPAT of $18 million.
Besides acquiring debt portfolios, Pioneer is also in the process of refinancing its existing senior debt facility. The Company has received indicative pricing for potential non-binding refinancing arrangements. Pioneer actively searches for an exclusive preferred party and anticipates announcing a successful outcome.
Pioneer has revised its previous PDP Investment Guidance from $60 million to $85 million. It also reported $1.8 billion of receivables due in FY24 while it updates its operational platform and looks to partner with more Australian and global institutions.
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