HRG Said to Halt Plan to Sell Salus After RadioShack LossesJodi Xu Klein and Katherine Chiglinsky
HRG Group Inc. has backed away from selling a distressed-lending unit after losses tied to bankrupt electronics retailer RadioShack Corp., according to a person with knowledge of the matter.
Instead it is focusing on winding down the loans held by the unit, Salus Capital Partners, said the person, who asked not to be identified because the process is private.
“We continue to manage the portfolio of loans there and have stopped initiating new loans,” HRG Chief Executive Officer Omar Asali told investors Thursday on an earnings call. George Sard, a spokesman for HRG Group at Sard Verbinnen & Co., declined to comment beyond those statements.
HRG had been reviewing options for Salus that included a sale, as the company seeks to focus on building the consumer-products business, Spectrum Brands Holdings Inc., the person said. Salus dismissed about 20 workers and CEO Andy Moser left after the unit suffered losses on a $250 million loan it arranged for RadioShack in 2013, 14 months before the retailer filed for bankruptcy.
The loan was by far the biggest in the firm’s history, moving it beyond its small niche of handing out loans of about $25 million to financially troubled retailers.
HRG had an impairment of $105 million tied to the RadioShack loan in the first nine months of its fiscal year, with the asset-management and insurance segments bearing the cost, according to the regulatory filing.
Asali’s company, which is backed by Richard Handler’s Leucadia National Corp., fell 4.6 percent to $13.46 at 4:15 p.m. in New York. HRG has slumped 4.9 percent this year.
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