One of the largest lenders operating in the high-cost short-term credit market has sold most of its loan book and business assets to a competitor, after entering administration.
Curo Transatlantic Limited (CTL), which trades as Wage Day Advance and Juo Loans, a high-cost short-term credit firm, placed itself into administration on February 25. KPMG was appointed as administrators to manage the firms’ businesses and affairs.
Curo completed a pre-pack administration sale of part of their loan book to Shelby Finance (trading as Dot Dot Loans), a regulated firm and subsidiary of Morses Club, a home credit provider and short-term lender. Around 50,000 customers will be moved from Curo to Shelby Finance.
On its website, Morses Club said its subsidiary Shelby had acquired the business and certain assets of Curo for £8.5m paid in cash, with 50 percent on completion and the balance over five months.
Under the terms of the deal, Morses Club is acquiring all the existing infrastructure of Curo including its decision platform, call centre, and online lending capabilities.
All of Curo’s current employees will become employees of Shelby Finance. The gross receivables (before any collection provisions), which exclude all the Curo bad loans identified by the company, amount to around £19m.
Paul Smith, chief executive of Morses Club, said: “This exciting acquisition of such a well-established online lending business represents a significant escalation for Morses Club’s product diversification strategy.
“The range of online lending products that we will deploy through the newly acquired platform will exclude any form of payday style lending and the trading style will be dropped. The loan products will fit neatly within the existing Dot Dot Loans strategy, in terms of loan duration, affordability and forbearance.”
He added: “This acquisition, alongside those recently announced in our core market, reinforces our plans to build a digital platform to meet the evolving needs of our customers across the UK, whether online or in the customer’s home.”
The Financial Conduct Authority (FCA) said it will continue to supervise CTL and is in close contact with the administrators with regard to the fair treatment of customers. The FCA added that it will engage closely with KPMG in respect of the loans which are not being sold.
KPMG has contacted affected customers to provide them with the relevant information and necessary contact details. KPMG has also updated the landing pages at both www.wagedayadvance.co.uk (link is external) and www.juoloans.co.uk (link is external).
Customers being moved to Shelby Finance Ltd, which includes all Juo Loans customers, will also receive communications from Shelby Finance, providing them with relevant information. Customers’ loans, agreements and repayment arrangements remain unaffected.
In a statement the FCA added: “Customers should continue to make any outstanding payments as instructed by the administrators, KPMG. All existing agreements remain in place and will not be affected by the proposed administration. However, the firm is no longer able to issue new loans.”