Cash Converters has entered into a joint venture with American pawn store giant EZCORP to launch the cash converters brand in Mexico and South America.
Cash Converters International has entered into a joint venture with American pawn store giant EZCORP to launch the cash converters brand in Mexico and South America.
The second-hand goods retailer will hold a 20 per cent interest in the JV through subsidiaries in return for granting a master licence to the project for Latin America while providing IT services, training and management support.
EZCORP will, in turn, inject $US3.6 million for an 80 per cent stake in the JV.
The company currently owns and operates 244 pawn stores in Mexico under the flag of Empeno Facil, and believes that the Cash Converters model is unique for the Mexican and Latin American markets.
“This is an exciting opportunity for us to achieve progress in these territories with minimal capital outlay and with the support of EZCORP, which has an established presence in Mexico,” Cash Converters managing director Peter Cumins said.
“We see significant opportunity for the provision of our financial services products and online platforms across the region.
"Although the joint venture is not expected to be a material contributor in the short term, we see strong growth potential for us in the region over the next five to 10 years.”
Shares in Cash Converters are currently trading at 92.5 cents per share, a rise of 1.5 cents since open, as of 7:50am, WST.