REG - Fiinu PLC - Fundraising, Issue of Equity, RPTs and TVR

FiinuAnnouncement

15/03/2023 07:00

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RNS Number : 9911S  Fiinu PLC  15 March 2023

15 March 2023

Fiinu Plc

("Fiinu", the "Company" or the "Group")

Fundraising, Issue of Equity, Related Party Transactions and TVR

Fiinu (AIM: BANK), a fintech company including the fully owned Fiinu Bank
Limited, creator of the Plugin Overdraft®, announces that it has
conditionally raised up to £6.49 million, before costs, ("Fundraising") in
new equity funding ("New Ordinary Shares") subject, inter alia, to admission
of the New Ordinary Shares to trading on the AIM Market of the London Stock
Exchange ("Admission").

 

This Fundraising is split into three components:

 

·    An immediate subscription ("Subscription") of 3,846,155 New Ordinary
Shares at an issue price of 13 pence per New Ordinary Share to new and
existing shareholders to raise approximately £0.5 million;

 

·    The proposed conversion of the existing £2.49 million loan facility
with Dewscope Limited ("Dewscope") ("Dewscope Loan"), of which £1.99 million
remains undrawn, into up to 19,153,847 New Ordinary Shares, at a price of 13
pence per New Ordinary Share. This conversion, which is by way of a further
agreement with Dewscope entered into on 14 March 2023, is expected to occur in
tranches following draw down, at the Company's option, between now and the end
of June 2023; and

 

·    £3.5 million draw down from a new three year share subscription
facility agreement  ("Subscription Facility"), with GEM Global Yield LLC SCS
and GEM Yield Bahamas Limited (together "GEM"), which has a total maximum draw
down potential of up to £40.0 million, at a price per New Ordinary Share
determined on the date of subscription, but with  a condition in respect of
this initial £3.5 million draw down that the issue price must not fall below
10p per New Ordinary Share, therefore the maximum number of New Ordinary
Shares that could be issued to GEM pursuant to the initial draw down is
35,000,000. It is expected that this issue of New Ordinary Shares to GEM and
Admission, will take place in early May 2023.

 

The New Ordinary Shares issued in respect of the Subscription and conversion
of the Dewscope Loan will be issued with new three-year warrants ("Warrants")
that are exercisable at 20 pence per share into new ordinary shares in the
Company at the ratio of 1 Warrant for every 19 New Ordinary Shares issued by
the Company (making a total of up to 1,210,526 Warrants). These Warrants
expire, unless exercised, three years after being issued, will not be admitted
to trading on AIM (although the underlying ordinary shares upon exercise shall
be) and may be re-priced in certain circumstances during the three-year
period.

 

In consideration of entering into the Subscription Facility, the Company has
issued 17 million warrants to GEM ("GEM Warrants") with an expiry date of 15
March 2026, that are exchangeable into new ordinary shares with an exercise
price of 20 pence per share. The GEM Warrants (which will not be admitted to
trading on AIM, although the underlying ordinary shares upon exercise shall
be) are transferable at GEM's option and may be re-priced in certain
circumstances during the three-year period.

 

Further details of all these arrangements are set out below.

 

This Fundraising, which forms part of the Company's anticipated further
funding requirements announced on 26 January 2023, will be drawn down between
now and the end of June 2023, subject to Admission. All the New Ordinary
Shares issued will rank pari passu with existing shares (save for the Warrants
and GEM Warrants above) and will rank as qualifying CET1 regulatory capital.
Further announcements will be made as New Ordinary Shares are issued and
Admission occurs.

 

The proposed Fundraising and regulatory capital plan has been shared with the
Prudential Regulation Authority ("PRA"( 1 )).

 

 

Commenting on the Fundraising, Chris Sweeney, CEO of Fiinu, said:

 

"As we progress through the next phase of our mobilisation plan, this initial
tranche of the overall funding requirement previously outlined, further
de-risks the business as it executes on its plans for its subsidiary, Fiinu
Bank Limited, to become a fully licenced bank which is anticipated to take
place in summer 2023, subject to regulatory approval and funding. We are
thankful to Dewscope, GEM and to all our investors for their continued
support."

 

 

Further Information on the Subscription

 

The Company has agreed to issue 3,846,155 New Ordinary Shares at an issue
price of 13 pence per New Ordinary Share to new and existing shareholders to
raise approximately £0.5 million. The New Ordinary Shares, will be issued
with 1 Warrant for every 19 New Ordinary Shares issued by the Company with an
exercise price of 20p per new ordinary share. These Warrants (approximately
202,429) expire, unless exercised, three years after being issued and will not
be admitted to trading on AIM (although the underlying ordinary shares upon
exercise shall be).

 

In respect of the Warrants, on the first anniversary of the Subscription, if
the share price of the Company is less than 90% of the exercise price of 20
pence, the original exercise price can be adjusted to a figure equating to
110% of the market price prevailing at that time. In addition, the exercise
price of the Warrants and the number of warrant shares can be adjusted from
time to time in a limited number of circumstances, such as a change in the
nominal value of the Company's ordinary shares, further issues of ordinary
shares, bonus issues or capital distributions.

 

Up to 3 million New Ordinary Shares have been placed with clients of Intrinsic
Capital LLP, where Mark Horrocks (a former Director of the Company and owner
of Dewscope) is both a partner and a client. As part of the Subscription, Mr
Horrocks will subscribe for 1,457,693 New Ordinary Shares.

 

 

Further information on the Dewscope loan conversion

 

On 15 June 2022, the Company entered into an unsecured facility agreement
("Dewscope Loan Agreement") with Dewscope (a company of which Mark Horrocks is
a director and is an indirect beneficiary), pursuant to which Dewscope agreed
to make available a loan facility of up to £2.49 million for a period of two
years (the "availability period"). The Company agreed to pay Dewscope an
arrangement fee in cash of 2% of the maximum facility amount and 3% on each
tranche draw down with a minimum tranche size of £250,000. The Company is
entitled to draw down amounts under this facility at its discretion on notice
to Dewscope. Interest is payable on amounts drawn down at a rate of 12.5% per
annum, paid monthly in arrears. The facility is unsecured.

On 15 November 2022, £500,000 of the Dewscope Loan was drawn down by the
Company.

 

On 14 March 2023, the Company entered into a further agreement with Dewscope
("Conversion Agreement") that allows for the Company to elect to convert all
or part of the £2.49 million of the Dewscope Loan into New Ordinary Shares at
a subscription price of 13 pence per New Ordinary Share. If the whole amount
of the Dewscope Loan was converted, the maximum number of New Ordinary Shares
that could be issued to Dewscope would be up to 19,153,847 New Ordinary
Shares.

 

In addition, new Warrants that are exercisable at 20 pence per share into new
ordinary shares at a ratio of 1 warrant for every 19 ordinary shares issued by
the Company, will be issued to Dewscope on conversion of the Dewscope Loan
into New Ordinary Shares. The maximum number of warrants that could be issued
in the event that the Company draws down upon, and then elects to convert, the
entire loan facility of £2.49 million into new ordinary shares would
therefore be up to approximately 1,008,097 Warrants.

 

In respect of the Warrants, on the first anniversary of entering into the
Conversion Agreement, if the share price of the Company is less than 90% of
the exercise price of 20 pence, the original exercise price can be adjusted to
a figure equating to 110% of the market price prevailing at that time. In
addition, the exercise price of the Warrants and the number of warrant shares
can be adjusted from time to time in a limited number of circumstances, such
as a change in the nominal value of the Company's ordinary shares, further
issues of ordinary shares, bonus issues or capital distributions.

 

The Directors expect that conversion of the Dewscope Loan will occur between
now and June 2023; further announcements will be made as appropriate.

 

By virtue of his interest in Dewscope, and participation in the Subscription,
Mark Horrocks, on conversion of the Dewscope Loan, is expected to become
interested in over 10% of the issued share capital of the Company and
therefore in turn its fully owned group company, Fiinu Bank Limited, for which
he has received FCA approval as a controller.

 

Related Party Transactions

 

As Mark Horrocks was a Director of the Company until 8 July 2022, entering
into the Conversion Agreement with Dewscope, and participation in the
Subscription, are related party transactions for Fiinu under AIM Rule 13 of
the AIM Rules for Companies. The Directors consider, having consulted with
SPARK Advisory Partners Limited, the Company's Nominated Adviser, that the
terms of the Conversion Agreement and the Subscription are fair and reasonable
insofar as the Company's shareholders are concerned.

 

 

Further information on the GEM Subscription Facility

 

On 14 March 2023, the Company entered into a share subscription facility
agreement ("Subscription Facility") with GEM for a maximum commitment period
of three years. Under the Subscription Facility, the Company can draw down, at
its option, up to £40 million in new equity funding, to be satisfied by the
issue of new ordinary shares in the Company, subject to certain conditions,
including Admission, by submitting a notice detailing the funds required by
the Company ("Subscription Notice").

 

The initial draw down, set out in this announcement, has been agreed at an
amount up to £3.50 million, the Subscription Notice submitted to GEM, and
will settle after a period of 30 trading days from today, being on or around
28  April 2023, subject to Admission. The number and subscription price of
the New Ordinary Shares issued in return will be calculated as 90% of the
average of the 30 closing bid prices at the end of that 30 day trading period,
but is conditional upon the subscription price for the New Ordinary Shares in
this initial Subscription Notice being not less than 10 pence per New Ordinary
Share, which is the nominal value of the Company's shares, therefore the
maximum number of shares that could be issued to GEM pursuant to the initial
draw down is 35,000,000. As receipt of the £3.50 million remains subject to
Admission, application for New Ordinary Shares to be admitted to trading on
AIM will be made in due course.

 

In respect of future possible drawdowns from the GEM Facility, the potential
number of new ordinary shares issued by the Company and the funds received as
a result of each Subscription Notice are dependent upon the average volume of
trading in the shares of the Company over a preceding period of 30 trading
days and the average closing bid prices at the end of each 30-day trading
period.

 

In addition, in consideration of entering into the Subscription Facility, the
Company issued 17 million new warrants to GEM ("GEM Warrants") with an expiry
date of 14 March 2026, that are exchangeable into new ordinary shares with an
exercise price of 20 pence. The GEM Warrants (which will not be admitted to
trading on AIM, although the underlying ordinary shares upon exercise will be)
are transferable at GEM's option.

 

In respect of the GEM Warrants, on the first anniversary of entering into the
Facility Agreement, if the share price of the Company is less than 90% of the
exercise price of 20 pence, the original exercise price can be adjusted to a
figure equating to 110% of the market price prevailing at that time. In
addition, the exercise price of the GEM Warrants and the number of warrant
shares can be adjusted from time to time in a limited number of circumstances,
such as a change in the nominal value of the Company's ordinary shares,
further issues of ordinary shares, bonus issues or capital distributions.

 

Whilst the Subscription Facility has a maximum drawdown capability of up to
£40 million over the three-year period, there is no guarantee that the
Company will raise any further money from GEM following the initial £3.50
million.

 

In addition, under the terms of the Subscription Facility, at no time is GEM
able to own more than 10% of the issued share capital of the Company.

 

Further announcements will be made as appropriate.

 

Possible effect of the fundraise on the Issued Share Capital of the Company

 

When all of the transactions envisaged in this announcement have been
completed, excluding the exercise and issue of all warrants, using 13 pence
per New Ordinary Share as an illustration, there would be a total number of
ordinary shares in issue of approximately 315,054,940. At the present time,
the Company has 265,131,861 ordinary shares in issue.

 

 

Admission and Total Voting Rights

 

The Fundraising is subject to Admission. The Company has the authority to
issue and allot the New Ordinary Shares pursuant to certain existing
shareholder authorities granting such powers to the directors at the Company's
General Meeting held on 20 February 2023. It is expected that Admission for
the New Ordinary Shares issued and allotted in respect of the Subscription
will become effective, and dealing in these New Ordinary Shares will commence,
at 8.00a.m, on or about 20 March 2023.  Further announcements regarding
Admission of the New Ordinary Shares in respect of the Subscription Facility
and/or the Conversion Agreement will be made as appropriate.

 

Following Admission of the New Ordinary Shares in respect of the Subscription,
the share capital of the Company will comprise 268,978,016 Ordinary Shares.
The above figure of 268,978,016 may be used by shareholders as the denominator
for the calculations by which they will determine if they are required to
notify their interest in Fiinu under the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.

 

 

Further funding requirements

 

As previously announced on 26 January 2023, the Company plans to raise a total
of approximately £35-40 million on a staged basis commencing in the run-up to
Easter through to completion in July 2023 in preparation for its anticipated
exit from mobilisation and the commencement of unrestricted banking services.
This Fundraising is the start of that staged funding process and management
forecasts indicate that this initial funding combined with the balance of that
£35-40 million total funding, when achieved, will be sufficient to resource
the Company in its initial year of full banking activity assuming the grant of
the unrestricted banking licence in July 2023.

Further announcements will be made regarding this process as appropriate.

 

Market Abuse Regulation ('MAR') Disclosure

 

Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No 596/2014 ('MAR'), which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, until the release of this announcement.

 

 

ENDS

 Enquiries:
 Fiinu plc                                                via Brazil London (press office for Fiinu)

 Chris Sweeney, Chief Executive Officer

 Philip Tansey, Chief Financial Officer

 www.fiinu.com (http://www.fiinu.com)
 SPARK Advisory Partners Limited (Nomad)                  Tel:  +44 (0) 203 368 3550

 Mark Brady / Adam Dawes
 SP Angel Corporate Finance LLP (Joint Broker)            Tel:  +44 (0) 207 470 0470

 Matthew Johnson / Charlie Bouverat (Corporate Finance)

 Abigail Wayne / Rob Rees (Corporate Broking)

 Panmure Gordon (UK) Limited (Joint Broker)               Tel:  +44 (0)207 886 2500

 Stephen Jones / Atholl Tweedie (Corporate Finance)

 Tom Scrivens / Hugh Rich (Corporate Broking)
 Brazil London (press office for Fiinu)                   Tel:  +44 (0) 207 785 7383

 Joshua Van Raalte / Christine Webb / Jamie Lester        Email: fiinu@agencybrazil.com

 

About Fiinu

Fiinu, founded in 2017, is a fintech group, including Fiinu Bank({1]), which
is authorised by the Prudential Regulatory Authority( 1 ). Fiinu's Plugin
Overdraft® is an unbundled overdraft solution which allows customers to have
an overdraft with Fiinu Bank without changing their existing bank. The
underlying Bank Independent Overdraft® technology platform is bank agnostic,
allowing Fiinu Bank to serve all other banks' customers. Open Banking allows
Fiinu's Plugin Overdraft® to attach ("plugin") to the customer's primary bank
account, no matter which bank they may use. Fiinu's vision is built around
Open Banking, and it believes that it increases competition and innovation in
UK banking.

For more information, please visit www.fiinu.com (http://www.fiinu.com) .

( 1 ) Fiinu Bank Limited obtained its UK deposit-taking banking licence with
restrictions from the Prudential Regulation Authority (PRA) and with the
consent of the Financial Conduct Authority (FCA) in July 2022.

About GEM

GEM Global Yield LLC SCS, part of the Global Emerging Markets Group, is a $4
billion, alternative investment group with offices in Paris, New York, and
Nassau (Bahamas). GEM manages a diverse set of investment vehicles and has
completed over 600 transactions in 70 countries.

For more information, please visit www.gemny.com

About Dewscope Limited

Dewscope Limited is a company of which Mark Horrocks is a director and is an
indirect beneficiary.

About Intrinsic Capital LLP

Intrinsic Capital LLP ("Intrinsic") is authorised by the Financial Conduct
Authority to provide general financial advice and investment services across a
wide range of strategies and products.

 

 

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