Lender’s recapitalisation efforts fail
Troubled credit provider Non-Standard Finance (NSF) has today confirmed its recapitalisation plan cannot go ahead.
The news comes just six weeks after NSF’s largest shareholder, Alchemy, withdrew its backing for the plan, meaning an equity raise would not be possible.
It means NSF will instead be transferred to secured lenders in return for release of a portion of their secured debt and the provision of a new lending facility – a move NSF calls the “Alternative Transaction”.
The Wakefield-headquartered business has also stated this morning that its Scheme of Arrangement was sanctioned yesterday by the court.
The Scheme is part of a broader transaction to restore the group’s balance sheet, fund the partial payment of redress claims under the Scheme and return Everyday Loans (branch-based lending) to profitable trading.
Jono Gillespie, group chief executive, said: “We are pleased that the Scheme has been sanctioned by the court, which is a critical milestone in restoring the Everyday Loans business to financial health.
“While we are very disappointed that it has not been possible to carry out the equity raise as planned, we are grateful that – with support from our secured lenders – we prepared a fall-back transaction for this exact eventuality.
“We will now take steps to implement that fall-back transaction, which will allow the group to grow and develop the Everyday Loans business, continue to provide much needed funding solutions for customers, and protect the position of the group’s employees.”
The group warns that while the Alternative Transaction will secure the future of the Everyday Loans business and allow it to pursue its growth plans, it will unfortunately result in no recovery for NSF’s shareholders.
In its update to the London Stock Exchange, the group adds: “The most likely outcome for Non-Standard Finance plc, as the ultimate parent company of the group, is an orderly winddown following implementation of the Alternative Transaction.
“To facilitate this process, Non-Standard Finance plc intends to take steps to cancel the listing of its ordinary shares on the standard segment of the Official List of the FCA and cancel the admission to trading of the shares on the Main Market for listed securities of the London Stock Exchange.
“In light of the above, independent non-executive director Niall Booker has decided not to stand for re-election as an independent non-executive director, or to stand for election as non-executive chairman, at the company’s 2023 Annual General Meeting which is to be held at 1pm today.
“Niall will stand down from the Board following the AGM.”
