Somers Ltd, parent company of Bermuda Commercial Bank, intends to buy a majority stake in Australian financial institution Resimac Ltd for $88.5 million.

The Bermudian-based company announced it had agreed to acquire a 79 per cent stake in Resimac from Ingot Capital Management Pty Ltd.

The deal also involves Somers issuing a loan note to Ingot, convertible into 4,984,210 Somers shares. The result will be that Ingot will have an interest of around 29.2 per cent in Somers.

Somers shareholders will have their say on the proposed deal in a special general meeting to be held on September 28, at 34 Bermudiana Road, Hamilton. Notice of the SGM is being sent to shareholders.

Resimac’s main business involves originating, servicing and securitising mortgage assets. It was the first issuer of Australian residential mortgage-backed securities in 1988. Since then it has issued more than A$19 billion through 36 domestic and international RMBS issues.

Resimac has had 136 full-time equivalent employees across offices in Sydney, Melbourne, Perth, Newcastle and Auckland.

For the 12 months ended June 30, 2016, Resimac made an after-tax profit of A$13 million (US$9.9 million) on revenue of A$70 million (US$53 million).

Resimac had unaudited shareholders’ funds of A$82 million (US$63 million), as of June 30 this year and total assets of A$5.4 billion (US$4.1 billion).

Resimac is in the final stages of a proposed merger with Homeloans Ltd, an Australian Stock Exchange-listed company. Under this scheme of arrangement, shareholders in Resimac will be issued new shares in Homeloans and Homeloans will remain listed on the ASX. Shareholders of Resimac will end up with 72.5 per cent of the enlarged group and Homeloans shareholders will have 27.5 per cent.

This merger is scheduled to complete in about a month.

Commenting on the acquisition, Warren McLeland, chairman of Somers said: “The is a major investment for Somers and fits in with the stated strategy to make corporate investments and acquisitions in the financial services sector. The acquisition of Resimac will complement Somers existing investments and the benefits from the acquisition will accrue to all Somers Shareholders. Somers is acquiring a well-run, profitable business which will diversify Somers’ investments and significantly increase the scale of Somers.”