Berkshire Hathaway will "cheer from the sidelines" for Home Capital

by Steve Randall on 20 Dec 2018

Berkshire Hathaway is making a substantial exit from Home Capital, the Canadian non-bank lender to which it extended a lifeline in 2017.

Berkshire agreed to lend Home $2 billion at the peak of its liquidity crisis, plus additional equity financing. In the time since, Home has shored up its finances, returned to profitability, and set itself on a path for growth.

“Following the successful completion of our Substantial Issuer Bid, Home Capital is in an excellent position to continue providing industry-leading service with a strong focus on sustainable risk management,” said Home Capital’s president and CEO Yousry Bissada. “Berkshire’s investment in Home Capital provided substantive assistance to the Company and created stability and value for the Company and its stakeholders at a critical time in 2017.”

Bissada thanked Berkshire for its support.

In a statement, Berkshire Hathaway’s Warren Buffet said that it was a pleasure to work with the Home Capital team but noted that with the credit facility repaid and Home’s shareholders deciding not to accept a further investment, the firm’s subsidiary Columbia Insurance Company’s holding (expected to below 10% by December 21) meant it was time to pull back.

“Although we have decided to substantially exit from our investment, we will continue to cheer from the sidelines for our friends at Home,” Buffet said.

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