Not thrilled with its stock price, nonprime auto lender TFC Enterprises has hired an advisor to help do something about it, said TFC Chief Executive Officer Robert Raley. This could mean the sale of the company.
The Norfolk, Va.-based, $25 million market cap company announced it had retained E&Y Capital Advisors LLC to help look a strategic alternatives.
"Our stock price is stuck," said Raley. A sale of TFC is an option, he said, but "certainly we'd like to attract additional capital to this company."
The day the news hit, the stock of TFC closed down three cents to $2.02.
As for a potential suitor, analyst Richard West, with Investrend Research, named Nicholas Financial Inc., a Clearwater, Fla.-based small auto lender. A call placed to Nicholas, which focuses its business on the Southeast of the U.S., was not returned.
Other public competitors, AmeriCredit Corp. and WFS Financial Inc., also did not return calls.
Raley, who returned as CEO in 1995 after a brief retirement, said no companies have expressed interest in a business combination with TFC recently. He added that the strategic review process would last two to four months. Lead banker at E&Y, William Tucker, did not return a call.
On June 29, TFC completed a $75 million warehouse facility with Westside Funding Corp., a sub of Westdeutsche Landesbank Girozentrale (West LB), for interim financing. West called the transaction "stop-gap" funding. Earlier this year, the company closed a $60 million double-A wrapped securitization with Rothschild.
For the first quarter, TFC's revenue rose to $9 million from $8.8 million in the year-prior period, while net income rose to $1.3 million from $875,000 from the first quarter 2001.