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LONDON (SHARECAST) - Personal insolvency group Debtmatters will dispose its IVA and debt resolution business and concentrate on its loan brokering service.
“Accordingly, the company confirms that it is no longer in a bid period,” it added.
The group will sell its IVA book for £6.4m to a consortium comprising of Grant Thornton UK and Totemic. It will also sell the residual Debtmatters Limited business to Creditflex for £800,000.
It will now focus on its loan broking division, which is trading in line with expectations, and change its name to Loanmakers Group.
All the monies raised from the disposal will reduce its company borrowings, said the group.
“It was becoming increasingly difficult to operate a successful direct marketing IVA business with acceptable profit margins in the face of increasing costs of case acquisition and reduced fee levels in tandem with ongoing sector uncertainty,” said the CEO Ges Ratcliffe.
“As a result of a detailed review, the board has concluded that the best long term strategy would be to exit the IVA sector completely and focus on Loanmakers, the profitable loan broking part of the business, which was acquired in June 2006,” he said.
Ratcliffe added that good prospects exist for Loanmakers but visibility is limited due to the challenges and uncertainties that currently exist in the financial markets.