June 9, 2017 / 8:26 PM / 2 years ago

Home Capital approached by Catalyst Capital: Globe & Mail

FILE PHOTO - The entry to the Home Capital Group's headquarters is seen at an office tower in the financial district of Toronto, Ontario, Canada on May 1, 2017. REUTERS/Chris Helgren/File Photo

TORONTO (Reuters) - Private equity fund Catalyst Capital Group Inc recently proposed a strategic partnership with Home Capital Group Inc (HCG.TO) that would see it injecting new capital into the lender, the Toronto-based Globe & Mail newspaper reported on Friday.

Citing sources familiar with the proposal, the Globe & Mail reported that Catalyst, an asset manager that focuses on distressed companies, had also put forward a proposed new management team for Home Capital with banking experience.

Home Capital is currently recruiting a new chief executive and chief financial officer.

The report said Catalyst is understood to have lined up support for the proposal from a group of institutional investors.

Depositors have withdrawn 95 percent of funds from Home Capital’s high interest savings accounts since March 27, when the company terminated the employment of former Chief Executive Martin Reid.

The withdrawals accelerated after April 19, when the Ontario Securities Commission, Canada’s biggest securities regulator, accused Home Capital of making misleading statements to investors about its mortgage underwriting business.

The company has said the accusations are without merit. Its funding has stabilized.

Home Capital declined to comment. Catalyst Capital did not respond to requests for comment.

Reporting by Matt Scuffham

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