TORONTO -- Shares in Home Capital Group were up 15 per cent in the first minutes of trading Thursday since it reached settlements in two cases that could have complicated efforts to recover from a damaging loss in investor confidence.
The Toronto-based mortgage lender's stock rose $1.83 to $13.95 per share (TSX:HCG) shortly after markets opened.
The rebound in the stock follows an announcement late Wednesday that Home Capital has agreed to pay $30.5 million to settle a class-action lawsuit and a matter before the Ontario Securities Commission concerning allegations of misleading disclosure.
Home Capital's shares (TSX:HCG) took a thrashing in late April, after Ontario's securities regulator announced it was pursuing allegations that the company and executives misled investors by not immediately disclosing information it uncovered about falsified loan applications.
The settlements are subject to OSC and court approval and conditional upon the approval of the other.
In a separate statement Thursday, Home Capital said it is aware of recent media reports about a potential refinancing transaction, and while it has indicated it is pursuing additional financing and other strategic options, it does not comment on speculation.
There have been reports suggesting Home Capital is negotiating with some of Canada's big banks to get a loan of up to $2 billion. The company secured a separate $2 billion line of credit to stay afloat from the Healthcare of Ontario Pension Plan in April.
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