TORONTO, April 1, 2013 /CNW/ - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS) today announced that its board of directors has approved a plan to dispose of the Company's non-core operating business segments. The decision reflects the Company's strategy, undertaken in recent years, to focus on financial services. Counsel's core operating business is Street Capital Financial Corporation ("Street Capital"), a Canadian residential mortgage lender that accounted for approximately 80% of Counsel's revenues in 2012 and which has experienced rapid growth since being acquired by Counsel on May 31, 2011.
"Counsel's board of directors explored a number of alternatives and has concluded that our plan provides the best option to unlock shareholder value," explained Allan Silber, Chairman and CEO of Counsel Corporation. "It allows management to focus and build on the unique opportunity for growth and profitability provided by Street Capital while maximizing the value in our non-core operating business segments for the benefit of our shareholders."
"Street Capital is a significant growth platform for Counsel," continued Mr. Silber. "Mortgage originations have increased by more than 60 per cent in 2012 compared to 2011, and our mortgage portfolio has more than doubled to over $12 billion since its acquisition, making Street Capital one of the leading non-bank lenders operating in the mortgage broker channel.
"Street Capital has an exciting growth strategy focused on increasing the volume of mortgages it originates by broadening and deepening its relationships with high quality mortgage brokers," Mr. Silber said. "Additionally, last December, Street Capital applied to Canada's Minister of Finance for approval to operate as a federally regulated Schedule I bank. If approved, it would enable the company to broaden its product line into other forms of consumer lending and related services, thereby increasing its value proposition to brokers and retail customers."
As part of its strategy to focus on financial services, Counsel has been streamlining its operations, including monetizing almost of all of its real estate assets and winding down its real estate management business. The decision to dispose of its remaining business segments accelerates this process.
The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address Counsel Corporation's expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which Counsel Corporation currently operates, but because of the factors listed herein, as well as other factors beyond Counsel Corporation's control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Company's securities and other regulatory filings.
SOURCE: Counsel Corporation
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