Cash Store Financial Services Inc. has finished up its investigation of an acquisition gone awry and appears to have concluded the issue was poor management, not something more sinister.
Some of the issues at Cash Store (a topic of numerous prior Streetwise posts on its troubles) stem from its acquisition of a portfolio of previously off-balance sheet loans that turned out to be way overvalued. How overvalued? Cash Store issued $132-million in bonds to purchase a loan portfolio. The purchase took place in early 2012. The portfolio was held at a fair value of $50-million by the end of last year.