Combination between Kredinor and Modhi

Kredinor and SpareBank 1-owned Modhi have signed a letter of intent

Modhi kredinor

Kredinor and SpareBank 1-owned Modhi have signed a letter of intent to combine the two companies and will thus become a leading institution in the debt collection industry, with the Nordics as the home market. Kredinor will also reorganise from a business cooperative to a limited liability company, and a non-profit foundation will be established to manage the ownership in Kredinor.

“Together with SpareBank 1-owned Modhi, Kredinor will better equipped for growth and development in line with market and customer expectations and requirements. At the same time, we will strengthen and professionalise our purpose establishing a foundation with charitable and philanthropic purposes,” says Kredinor’s Chairman of the Board Sverre Gjessing.

Kredinor is one of Norway’s largest debt collection companies with a history dating back to Christiania Kreditorforening in 1905. The company has about NOK 980 million in annual revenues and 420 employees. Modhi Finance AS and its subsidiaries are owned by SpareBank 1 Gruppen AS and has approximately NOK 610 million in annual revenues and 200 employees. Modhi Finance AS has in addition subsidiaries with strong growth in Sweden and Finland.

The new company will be named Kredinor, and the head office will be in Oslo, with the Nordic region as its home market. The CEO of Kredinor, Klaus-Anders Nysteen will lead the company, and he believes that the debt collection industry will change considerably in the years to come.

“Kredinor’s key strength is supporting and helping people who have found themselves in a challenging financial situation. By joining forces with Modhi, we will be able to invest even more in following up individuals through good customer service and new technology. The new Kredinor will take a stronger and more socially responsible position in the Norwegian business community in the coming years,” says Klaus-Anders Nysteen.

Rolf Eek-Johansen is currently CEO of Modhi Finance and will be Deputy CEO of the new company. He emphasises that the companies have many shared values and the same cultural heritage.

“Modhi and Kredinor are two expert environments within responsible debt collection and portfolio investments, and we will bring the best of both cultures into the new company. We will help our customers becoming better payers, and thus also help our clients receive faster payment and more predictable cash flows. In sum, this will be good for the profitability of the Norwegian business community,” says Rolf Eek-Johansen.

New company form offers great opportunities

Kredinor is currently organised as a business cooperative, but prior to the combination process, the company will be transformed into a limited liability company with a newly established foundation as the owner.

“As the part owner of the limited liability company, the Kredinor Foundation will manage the values created in Kredinor over 117 years. The return on the funds can be allocated to socially beneficial purposes. In addition, portions of the dividends received from Kredinor AS can be paid as customer dividends to the limited liability company’s clients. The model with a foundation as owner is well-proven and works well for other companies. The Gjensidige Foundation is a good example,” says Chairman of the Board Sverre Gjessing.

According to Nysteen, the reorganisation and combination provide strong opportunities for a more proactive strategy within the purchase of portfolios of defaulted debt. This will provide greater latitude and make Kredinor a more attractive partner for banks and others.

“As a limited liability company, access to capital will improve significantly, a prerequisite for being able to compete effectively for portfolio investments. The model also offers flexibility to consider various growth strategies and we can keep all future and partner opportunities open,” says Nysteen.

Information about the process moving forward

The reorganisation of Kredinor is conditional on the Norwegian Ministry of Finance granting a tax exemption for the transfer of the business to Kredinor AS, as applied for, and The Financial Supervisory Authority of Norway granting permission to establish the new group. Similarly, a combination with Modhi is conditional on approval from the Norwegian Competition Authority and The Financial Supervisory Authority of Norway. Until this is in place, there will be no changes for clients, customers or employees in the two companies.

The intention of the parties is for the Kredinor Foundation and the SpareBank 1 Group to end up with equal ownership interests in the company. The owners will jointly contribute funds to the company to ensure planned growth.

Contact persons:

Klaus-Anders Nysteen, Kredinor SA. Mob.: +47 992 65 691

Rolf Eek-Johansen, Modhi Finance. Mob.: +47 481 35 171