EQUIVEST FINANCE ANNOUNCES THE SIGNING OF A LETTER OF INTENT TO ACQUIRE 801 AUTO RECEIVABLES, INC.
HOLLYWOOD, Fla., Jan. 12 /PRNewswire/ -- Equivest Finance, Inc. (NASDAQ: EQUI), today announced that it has signed a letter of intent to acquire 100 percent of the issued and outstanding common stock of 801 Auto Receivables, Inc., New York, a privately-held company engaged in the business of acquiring, warehousing, and selling insured automobile loans. Equivest Finance's management believes that the acquisition should significantly enhance Equivest Finance's overall revenues and profitability. 801 Auto Receivables has already arranged to acquire, repackage and sell a total of 334 loans having an aggregate value of $3,360,075 in the first quarter of its fiscal 1993 ended Dec. 31, 1992, representing net after-tax profit for the quarter in excess of $400,000. Year-end net after-tax profit in 1993 for 801 Auto Receivables is currently projected at not less than $1,500,000. The terms of the acquisition expressed in the letter of intent include the purchase of all of 801 Auto Receivables' common stock in exchange for 5,000,000 shares of the common stock of Equivest Finance. Upon completion of this transaction, the shares issued would represent approximately 70 percent of the common stock of Equivest Finance and would constitute a change in control of the company. Equivest Finance is engaged in the insurance premium finance business in Florida; specializing in financing automobile insurance premiums for the non-standard market. According to Murray Bacal, chairman and chief executive officer, the acquisition of 801 Auto Receivables is consistent with the company's objective of diversifying into additional asset based financing areas. Mr. Bacal noted: "Automobile finance is complementary to our current business. Moreover, acquiring 801 Auto Receivables will give us access to automobile loan origination sources, additional credit facilities, and sophisticated securitization and distribution channels." 801 Auto Receivables' primary source of loans is currently The Clearing House, Inc. (TCH), a multi-state loan procurement business which was recently acquired by the principals of 801 Auto Receivables. TCH has developed a network of automobile dealerships from which TCH originates or acquires customer auto loans. The entire loan amount of all qualifying loans is insured by Agricultural Excess and Surplus Insurance Co., and reinsured by Great American Insurance Company. Based upon its dealer network, TCH anticipates increasing its loan originations during calendar year 1993 from its current 200 loans per month to approximately 650 loans per month. The average principal amount of the loans is approximately $10,000. 801 Auto Receivables has an existing credit facility of $5 million. The principals of 801 Auto Receivables and TCH include Mr. Bacal, Mr. Drew Schaefer, and Mr. Paul Wallace. Mr. Schaefer is the chairman of the board of Aegis Holdings Corporation (AHC), a New York based financial services firm. Mr. Wallace is vice chairman of AHC. Aegis Capital Markets, a subsidiary of AHC, is engaged in the business of: (a) investment banking related to the obtaining of credit facilities to acquire and warehouse loans; and (b) packaging those loans into portfolios, increasing the credit rating for such portfolios, and selling the loan portfolios in the public markets. The acquisition described herein is subject to: completion of due diligence; successful completion of final negotiations of any remaining material terms and conditions; and the signing of definitive agreements. Equivest Finance, Inc., is publicly-held, and its shares are included for trading on NASDAQ under the symbol "EQUI". -0- 1/12/93 /CONTACT: James Rothman, executive vice president of Equivest Finance, 305-431-1333; or Philippe Niemetz of W.P.H. Consultants Ltd., 212-344-6464, for Equivest Finance/ (EQUI)
CO: Equivest Finance, Inc.; 801 Auto Receivables, Inc. ST: Florida, New York IN: SU: TNM
SM-GK -- NY100 -- 4107 01/12/93 14:11 EST
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|Date:||Jan 12, 1993|
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