Abode Mortgage intends to sell its mortgage origination business to a “private Vancouver-based investment firm.”
The selling price is “up to $3.5 million,” in annual cash installments.
Abode was essentially forced into the sale because of a need to “recapitalize” the company. This need became dire when, according to the company:
“…The Company's financier and whole loan purchaser (withdrew) from its existing funding agreement with the Company.”
Abode says, “The Company has made arrangements for interim funding and mortgage loan purchases, and is in discussions with several financial institutions to provide replacement lending and mortgage purchase facilities.”
Abode CEO, Mike Linehan, said:
"We are very pleased that the business our employees have built with our industry partners over the last several years will be continued under new ownership. We are confident that this business will have a bright future once it has been adequately and more appropriately capitalized. While we are disappointed that this recapitalization could not occur within the framework of continued ownership by the Company, we are confident that the agreement reached today represents the best option available under the circumstances, including the withdrawal of the Company's current financier. We will work diligently with the new owner to complete the necessary recapitalization of the mortgage origination operations."
Abode’s stock was halted on Tuesday, and last traded at 0.02 a share.
The sale is subject to a variety of conditions. We’ll report back if/when it closes. In the meantime, we wish everyone at Abode the best with the transition. Abode always had exceptional service and a hard-working staff. It’s just difficult for a non-balance sheet lender to compete in this market…