Publications
Partners
- For more financial news, go to the News24 Business front page.
SA's biggest taxi financier Transaction Capital, which also owns WeBuyCars, has signed an agreement with an unnamed bank that will allow it to originate loans for its Gomo business, part of a focus of providing funding and insurance for older vehicles.
Gomo enters into instalment sale agreements and rental agreements with individuals looking to finance the purchase of vehicles, with Transaction Capital saying on Monday the funding agreement will allow it to maximise its growth opportunities.
Gomo has currently concluded more than 2 500 vehicle backed loans and has a loan book of R515 million.
Under the new agreement Gomo will be able to originate loans for the bank on agreed criteria, earning a portion of net interest margin and other fees, and with the assets ultimately being funded on the unanamed bank’s balance sheet. The Gomo product will be available across the entire national dealership network of WeBuyCars, and not just in Gauteng as it is at present.
Transaction Capital, valued at about R4.8 billion on the JSE, is in the midst of a recovery drive after pressure on the taxi industry and a sharp drop off in used-vehicle prices severely cut into its profits, and its shares have lost more than 80% of their value so far in 2023.
The company suffered a loss of almost R1.9 billion in its six months to end March after its subsidiary WeBuyCars was forced to sell second-hand cars at a loss, and the wheels came off its taxi financing business. Its total debt has jumped more than a quarter to almost R2.5 billion.
READ | Crisis sell-off: Market is sending WeBuyCars owner Transaction Capital a message
The company had said in May that while it remained sufficiently capitalised, and both WeBuyCars and debt collector Nutun were isolated by the restructuring of SA Taxi, business would still need support from debt funders to support SA Taxi's ongoing lending operations. It had also said in its half-year results that "significant progress has been made in securing a symbiotic arrangement with a substantial funding partner that will allow Gomo to write loans directly on the funder’s balance sheet."
