September 26, 2019 / 4:12 AM / 5 months ago

KKR, Deutsche Bank, Varde seek 35% Latitude selldown in Australian IPO

* Shares offered at between A$2 to A$2.25 each

* Shares expected to trade under LFS on Oct. 18

* KKR, DB, Varde second attempt at listing, 35% selldown

* Latitude valued at up to A$4 bln

By Paulina Duran

SYDNEY, Sept 26 (Reuters) - U.S. private equity firm KKR & Co and its partners want to raise up to $945.42 million in exchange for 35% of one of Australia's largest non-bank lenders, Latitude Financial, in its second attempt at listing, documents show.

Latitude's prospectus, filed with the regulator on Thursday and seen by Reuters, values the finance company at between A$2 and A$2.5 per share, giving it a market valuation of up to A$4 billion ($2.70 billion).

It would be the largest IPO in Australia since global energy trader Vitol raised A$2.6 billion floating its oil refining business Viva Energy in July 2018, according to Refinitiv data, even though it is less than Latitude had hoped to raise in its attempt last year.

Brokers including Goldman Sachs, Macquarie Group , and UBS will price the shares via a book-build process on Oct. 15 to Oct. 16, while the shares are expected to trade on Oct. 18 under the code LFS, according to the document.

"The business has a strong financial profile and solid growth forecasts, underpinned by ongoing investments in technology that will deliver ... robust returns," Latitude Chairman Mike Tilley said in an emailed statement.

The firm, which offers easy access loans and credit cards with minimal paperwork, expects to report 3% growth in cash earnings of about A$288 million for the 12 months ending June 2020, and pay investors dividends of between 4.6% and 5.2%.

KKR, Deutsche Bank and Varde Partners founded the company in 2015 when they bought GE Capital's Australian and New Zealand consumer lending arm for A$8.2 billion.[ ]

Today, it has about A$8 billion in gross loans to 2 million customers, primarily credit cards, personal loans and auto loans, and it plans to grow its digital and installment payment business, the prospectus says.

At listing, KKR and Deutsche Bank would own about 20% each and Varde Partners 13%. The balance will be owned by minority shareholders, the prospectus said.

The majority of the proceeds from the IPO will be used to repay for the equity and loans to KKR, Deutsche Bank and Varde, with about A$42 million expected to be kept as cash on Latitude's balance sheet.

Last year, Latitude deferred a planned IPO that would value the business at about A$5 billion due to market conditions and a change in its management, while the country's financial industry was also being scrutinised by a national misconduct inquiry.

$1 = 1.4808 Australian dollars Reporting by Paulina Duran in Sydney; Editing by Stephen Coates

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