Specialist lender MKM Capital has abandoned its plans for a stock market listing in favour of selling a "strategic equity stake" to Adelaide Bank.

 

In November 2006 joint managing director Graham Mendelowitz told Australian Broker, the lender would be seeking to offer our loan introducers and other key business partners "shares at a discount."

 

However in the wake of the current credit market situation and future uncertainty, MKM said it had decided after "retaining advisors to assess its strategic growth options" that a trade transaction with the bank would bring the most benefit to its "customers, business partners, staff and shareholders".

 

Prior to the deal, announced at the end of February, MKM has been owned by its joint managing directors Mendelowitz, and Mervyn Kark as well as an offshore private investor consortium.

 

Under the terms of the transaction MKM expects its distribution platform to benefit via access to Adelaide Bank's origination network as well as "extract further operational benefits over time"

 

The lender will continue to operate independently under its existing brand with its key management retained.

 

"The opportunity to align ourselves with an established institutional player in the extremely competitive mortgage industry is very exciting for MKM," Mendelowitz and Kark said.

 

"In a highly product saturated and increasingly intermediated market the timing of this transaction, particularly in the current and foreseeable credit market environment, is opportune as we expect to ramp up our origination significantly over the short to medium term both in terms of an expanded range of innovative product offerings and a more extensive and targeted distribution footprint," they said.