UK-based investment firm Chenavari is looking to sell its entire stake in Irish financial services firm Dilosk, The Irish Times reported citing undisclosed sources.
The move will see the London-based firm exit the country’s largest non-bank mortgage lender ICS Mortgages, which is owned by Dilosk.
At its peak in 2018, Chenavari owned as much as a 30% stake in Dilosk.
Last year, the investment firm slashed its shareholding in Dilosk by selling more than half of it and currently, it owns a 14.4% stake in the lender.
Chenavari’s divestment coincided with Dilosk founders Fergal McGrath and his brother Oran increasing their shareholding in ICS Mortgages to over 50%.
As per the report, American investment bank Houlihan Lokey is advising Chenavari on the deal.
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Attestor Capital, which also owns an 18.8% stake in Dilosk, did not comment on its holdings.
Dilosk too did not comment on the minority stakeholders and said that the firm is not in talks that could result in the sale of the business.
Earlier this week, ICS Mortgages increased the interest rates for its three- and five-year fixed-rate mortgages by 0.2-0.45% points.
ICS Mortgages’ move is aimed at bolstering its lending margins to deal with rising borrowing costs on the international bond markets, which is its source of funding.
Chenavari, however, had been weighing options for its stake in ICS Mortgages long before the hike in interest rates, the report said.
Dilosk acquired the ICS Mortgages brand in 2014 from the Bank of Ireland.
In 2021, Dilosk’s new lending is said to have grown by 143% to €530m as Ulster Bank and KBC Bank Ireland decided to close their operations in the country, giving it a 5% market share, which it plans to double in within three years.