No margin lending as John McGrath's McGrath Group shares have never been security for any loan

No margin lending as John McGrath's McGrath Group shares have never been security for any loan
No margin lending as John McGrath's McGrath Group shares have never been security for any loan

McGrath Limited has responded to press speculation today in relation to a purported margin lending facility by John McGrath’s investment company, Fondorru Pty Limited, which holds shares in the listed estate agency.

John McGrath confirmed to the board that there is no margin lending facility with respect to his shares in MEA.

"His shares in MEA are not and have never been used as security for any loan," the shareholders were advised. 

McGrath holds about 26 per cent of the shares in the listed company which has a market cap of $62 million.

The private company, Fondorru, established in 1990, reportedly controls more than half of his 26 per cent stake. The listed shares were trading at 44 cents today.

The company's securities trading policy prohibited margin lending on shares in McGrath by its directors and executives.

The issue arose as the real estate boss John McGrath described reports of a $16.2 million gambling debt as "ridiculous."

On its late 2015 float, the McGrath Network comprised over 600 agents responsible for sales turnover of $11.6 billion in FY2015 from 11,000 sales. It managed 22,700 properties, which had a value of $16.6 billion. McGrath’s Oxygen Home Loans business had 31 mortgage brokers with loans under management of $2 billion, as at its 2015 float date. 

Its most recent advisory was $2.7 billion in loans under management, with 36 brokers, some 657 agents securing 12,800 sales with a $13.9 billion total, along with 24,700 properties under management. 

 

 

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