Beleaguered mortgage company Firstfolio has reported a heavy loss in its latest half-yearly report – but has been granted relief in the form of a debt extension.
Yesterday, Firstfolio reported a loss of $300,000 for the six months to December, compared with a net profit of $1.8 million in the previous corresponding period.
Revenue was down 3% to $37.5 million and the value of the loan book fell by 2% to $18.5 billion.
Fortunately for Firstfolio, Commonwealth Bank has given it a waiver from complying with its covenants until April 7, the mortgage company announced yesterday.
Firstfolio has a $30.3 million senior debt facility with Commonwealth Bank, but last year reported danger of loan covenant breach and so was recapitalising the business to inject new equity and reduce debt.
But Firstfolio took another blow last month, after IZN Investments Ace Management – the company which agreed to invest a minimum of $39.5m of equity capital in Firstfolio – missed the 20 January deadline and was unable to confirm when the funds would be transferred.
The company also has large outstanding debts to Westpac – which has extended the revolving period until the end of this week.
Firstfolio’s interim CEO Mark Flack agreed to stand down earlier this month from his position following the firm’s recapitalisation proposal issues. He was appointed to the position in July last year until completion of the company’s $50.2m recapitalisation proposal, following which he was to be appointed managing director of the company.
The board instead appointed Greg Pynt, an executive director of the company, to oversee Firstfolio’s activities until the recapitalisation proposal proceeds or a permanent new CEO is appointed.