Humm (ASX:HUM) shares fall over 3% as majority of board members resign

June 22, 2022 01:16 PM AEST | By Bhawna Gupta

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Humm (ASX:HUM) shares fall over 3% as majority of board members resign — Image source: © Endostock | Megapixl.com

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Highlights:

The proposed sale of HCF to Latitude Group led the majority of directors of hummgroup to leave the company.

hummgroup shares were trading in red today.

Andrew Abercrombie, founding director of humm group limited (ASX:HUM), launched a shareholder campaign on Tuesday (21 June 2022) to oppose the sale of humm's consumer finance business to Latitude Financial calling the arrangement a "garage sale" that undervalued the company.

The falling through of the proposed sale of Humm Consumer Finance (HCF) to Latitude Group Holdings Limited (ASX:LFS) have led the majority of directors of hummgroup to conclude that they cannot remain on the board of directors with Abercrombie.

On the back of the news, shares of hummgroup were trading 3.81% lower at AU$0.51 each on ASX today at 12.58 PM AEST; however, Latitude Group's shares were 1.59% up, trading at AU$1.28 apiece at 12.58 PM AEST.

In an ASX announcement, hummgroup stated that most directors feel that promptly making changes to the board of directors is in the shareholders' best interests. As a result, Alistair Muir and John Wylie AC have notified their decision to leave, which will take effect immediately, while Carole Campbell, Christine Christian AO and Rajeev Dhawan will resign once replacement directors have been chosen.

The nearly 30% gain in the hummgroup share price to 93 cents when the acquisition was first disclosed demonstrates the agreement's initial very favourable market appraisal.

Source: © Kenchiro755 | Megapixl.com

Earlier this year, hummgroup, formerly Flexigroup, had agreed to sell its consumer finance buiness to Ahmed Fahour-led Latitude Financial for AU$335 million. The move was aimed to help Latitude expand into the BNPL sector while retaining humm’s position as a commercial financing company.

hummgroup announced the termination of the proposed sale of HCF on 17 June 2022. According to the corporation, this is a mutual agreement, and the decision was made in light of the severe financial market disruption.

Bottomline

Due to lower receivables, margin compression, and expenses incurred in its new product and international growth strategies - strategies that were launched in a better economic and sector environment - the HCF group of businesses faced extremely difficult trading conditions for the five months ending 31 May 2022.

Also Read: Why are Humm group (ASX:HUM) & Latitude (ASX:LFS) shares in news today?

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