Chesswood Group Explores Strategic Options

by Warren Seah

Chesswood Group, a leading specialty-finance provider based in Toronto, has announced a comprehensive review of its strategic alternatives. The company, which offers a wide range of financial services including commercial equipment leases and loans, automotive loans, home-improvement financing, legal financing, and asset management, aims to bolster shareholder value through this initiative.

To facilitate the review process, Chesswood will temporarily suspend its dividend payouts. The reinstatement of dividends will be contingent upon the outcome of the strategic review. The company intends to explore various options, including the potential sale of select assets, portfolio wind-down, and alternative strategic opportunities.

In order to ensure an objective evaluation of its alternatives, Chesswood has appointed a special committee that will engage external financial advisors. While the company acknowledges that the review may not ultimately lead to significant changes, the comprehensive analysis will provide valuable insights into its future direction.

Chesswood highlights the challenges faced by financial services companies in light of rising interest rates and recent bank failures in the United States. Despite these industry-wide challenges, private credit interest in commercial and consumer origination platforms remains strong. Chesswood acknowledges that it too has been impacted by these market realities and has already adjusted its operations accordingly.

During the last quarter ending on September 30th, Chesswood reported a decline in net income to CAD 110,000 (USD 81,906) compared to CAD 12.3 million in the previous year. However, revenue increased to CAD 80 million from CAD 73.1 million during the same period.

The strategic review is expected to be concluded by the end of March. Chesswood remains committed to maximising value for its shareholders and ensuring its long-term success in the ever-evolving financial landscape.

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