HGH - Heartland Group Holdings

[couta1]

Percy I think you would know well by now that the ComCom are the most incompetent bunch of academic beaurocrats to ever exist in NZ, they live in their own pretend world, a bit like children living in fantasies only with far more serious consequences including the destruction of individual and corporate wealth.

[Marilyn Munroe]

This omnishambles it the confluence of a wish by legislators to get loan sharks and the laws of unintended consequences.

Both the legislation and this court case revolves around using fees as a profit centre rather than for the recovery of costs. The legislation tries to prevent this but ended up being over-broad and overreaching.

Previously in order to appear competitive some lenders and retailers would advertise a low interest rate and then seek to recover this discounting with masked fees.This was viewed by the legislators as a deceptive practise.

Rogers point about the recovery of profit margins is a valid one. The doctrinaire approach by MBIE that all profits should be recovered through interest charges is bad because there is no reason that I can think of that makes a disclosed explicit charge for the lenders profit abhorrent and as Roger points out in some circumstances is the more reasonable approach.

My solution to this would be to allow loans with a less rule bound approach where the loan is tied to a physical purchase and this purchase secures the loan on a non recourse basis.

Non recourse loans are where the recovery of a loan in default is limited to the item used as security. So if a lender loans shonkily to an at risk borrower it more likely to blow up their face with less prospect of a full recovery. This in my opinion will do more to encourage responsible lending than poor rules badly enforced by MBIE.

My idea would divert MBIE efforts to where it is really needed, cash advances from pay day lenders

Boop boop de do
Marilyn

[percy]

Marilyn Munroe.
Your post makes good sense to me.

[Marilyn Munroe]

Marilyn Munroe.
Your post makes good sense to me.

While my proposal may be a good idea there is a problem.

It would require bureaucrats from MBIE who are currently sitting behind their desks interpreting rules so vacuous it takes the Court of Appeal to sort them out to change to walking up driveways with barking dogs in less friendly parts of town and talking to whoever they meet about things like compliance, processes, and codes of conduct.

How likely do think that will be?

Boop boop de do
Marilyn

[percy]

While my proposal may be a good idea there is a problem.

It would require bureaucrats from MBIE who are currently sitting behind their desks interpreting rules so vacuous it takes the Court of Appeal to sort them out to change to walking up driveways with barking dogs in less friendly parts of town and talking to whoever they meet about things like compliance, processes, and codes of conduct.

How likely do think that will be?

Boop boop de do
Marilyn

I still think the answer is the courts.Their record of debt collection is hopeless.Just take one brave QC to ask the judge, if he could tell him how successful are the courts with their collections!!! Point proved???

[percy]

Today's announcement means Seniors' 43,000,000 shares or 9.282% can now be sold.
The sp weakness has been signalling a placement.I believe this will be done through Forbar,but I do not know at what price.

[Cool Bear]

Today's announcement means Seniors' 43,000,000 shares or 9.282% can now be sold.
The sp weakness has been signalling a placement.I believe this will be done through Forbar,but I do not know at what price.

Percy, I read the announcement as that the 43m shares HAD been sold - was wondering where it went or who bought it as it did not appear in the volume traded today. Anybody can shed light on this?

Summary for Heartland HER Holdings Limited

For last disclosure,--

(a) total number held in class: 43,000,000

(b) total in class: 463,266,592

(c) total percentage held in class: 9.282%

For current holding after ceasing to have substantial holding,--

(a) total number held in class: Nil

(b) total in class: 466,946,644

(c) total percentage held in class: 0%

[Xerof]

If you read the explanation carefully, you should be able to determine that Heartland HER Holdings held these in escrow under the lock-up agreement for Seniors. They came out of escrow today, therefore are no longer held by Heartland HER, and have passed to Seniors. So Heartland HER Holdings have declared they no longer have an interest or control over the shares. Doubtless, in due course Seniors will declare a holding of 43m. They have 7 days to make such announcement IMMSMR

percy has the goss on an orderly placement

Can I suggest $1.18 as a disposal price percy????

[percy]

If you read the explanation carefully, you should be able to determine that Heartland HER Holdings held these in escrow under the lock-up agreement for Seniors. They came out of escrow today, therefore are no longer held by Heartland HER, and have passed to Seniors. So Heartland HER Holdings have declared they no longer have an interest or control over the shares. Doubtless, in due course Seniors will declare a holding of 43m. They have 7 days to make such announcement IMMSMR

percy has the goss on an orderly placement

Can I suggest $1.18 as a disposal price percy????

Yes $1.18 may be close.
I think the price will leak out tomorrow.
The sell down means it will not be at $1.30, which I thought would have been possible a month or so ago..!!!!! lol.

[Baa_Baa]

With respect Marilyn M,

No lender wants the assets offered as security, of which few are of any realistic tangible or convertible value anyway. They just want the repayments with interest, preferably forever. They lend money, straight and simple. Recovering a default loan is expensive, but still better than recovering the asset that backs the loan. Easier to right off the loan, if pressed, or recover the asset and sell at book or below to offset the life-of-loan losses. This however is a level above the target of ComCom, though I agree it is caught in the web.

To your other point, the loan sharks to which the legislators appear targeted, they don't even require or insist on asset backing, they require only a promise, to repay the loan. Hence the outrageous margins they demand, and get. Harmoney is in this low-life lender category, targeting people who have little or no option, but are prepared to promise to repay. This is borderline lending ethics. A fancy website doesn't make the practice of lending to the desperate who have no assets to back their commitment to paying exorbitant interest rates any more ethical.

So I put it to anyone who blames the ComCom for incompetence, to suggest a more finely tuned approach to distinguishing between the lenders who insist on asset backing but don't really want to go there, versus the target problem being lenders who prey on the cash poor and turn to the loan sharks, including Harmoney dressed up in fancy website clothing, who willinging lend a few meagre $, of the punters who have money and participate, on the promise of repayment -next payday, or Kaching! penalties and interest over and above the outrageous daily rates already engineered into their largess.

Tough isn't it? Don't be too quick to hammer the legislators, they are not the problem, they are simply trying to find a solution. If we could write a better policy and legislation, maybe we could do better by that than buying the bank, or it's puny lenders who perpetuate the status quo.

BAA

This omnishambles it the confluence of a wish by legislators to get loan sharks and the laws of unintended consequences.

.. snip ..

My solution to this would be to allow loans with a less rule bound approach where the loan is tied to a physical purchase and this purchase secures the loan on a non recourse basis.

Non recourse loans are where the recovery of a loan in default is limited to the item used as security.

.. end snip ..

Boop boop de do
Marilyn