Lenders provisionally back rescue plan for credit provider

Credit provider Non-Standard Finance (NSF) has agreed a deal with its lenders which it hopes will underpin rescue efforts to save the group.

Its secured lenders have provisionally agreed to release £71m of secured debt in exchange for 20% of the company.

NSF plans to raise £95m through a share placing that will effectively wipe out existing shareholders.

The group warned that if the fundraise fails, its remaining options would be to pursue an alternative transaction that would see the lenders take control or enter administration – both scenarios resulting in no return for shareholders.

NSF has also announced today that non-executive chairman Charles Gregson will stand down at the company’s AGM and be replaced by former Cooperative Bank chief executive Niall Booker.

In a statement, NSF said: “The board welcomes the indicative proposal from its lenders which would substantially improve the company’s balance sheet following a successful capital raise, underpinning the prospects for strong growth in NSF’s ongoing branch-branched lending business and a return to group profitability.”

NSF’s lenders have agreed to extend its secured debt facilities by four years, to June 2027, with a reduced fixed interest rate of 5%.

NSF’s Loans at Home division entered administration a year ago, and now just operates through its branch-based lending brand Everyday Loans.

The group has a market value of just over £1m, a huge collapse from just four years ago when it failed in its attempted £1.3bn hostile takeover of Provident Financial.