REG - Non-Standard Fin - Shareholder Update

Non-Standard FinanceAnnouncement

11/03/2022 14:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220311:nRSK5415Ea&default-theme=true

RNS Number : 5415E  Non-Standard Finance PLC  11 March 2022

Non-Standard Finance plc

 

('NSF', the 'Company' or the 'Group')

 

11 March 2022

 

Update on outstanding regulatory matters

As previously announced, the Group has been working to resolve certain
outstanding regulatory matters so that it might then proceed with a
substantial capital raise  ('Capital Raise') that, if successful, would be
used to fund customer redress as well as strengthen the Group's balance sheet
and transform its prospects.  Following recent developments, the Board is
issuing the following update on these matters.

Independent regulatory reviews into branch-based lending and home credit

Having first agreed their scope with the FCA, independent reviews into both
branch-based lending and home credit were initiated in 2021 to consider the
read-across from the multi-firm review into guarantor loans and to ensure that
recent decisions at the Financial Ombudsman Service were taken into account in
assessing whether or not any customers may have suffered harm.

Whilst the conclusion of the review into branch-based lending (Everyday Loans)
was that there is no requirement for any customer redress, in home credit the
conclusion was that there may have been harm and, following extensive
discussions with the FCA about how this should be defined and the implications
for future lending, the Directors of SD Taylor Limited (trading as 'Loans at
Home') reluctantly concluded that the Loans at Home business is no longer
viable and so have applied to the FCA to grant permission for Loans at Home to
be placed into administration and to appoint insolvency practitioners from
Grant Thornton UK LLP as administrators.  The Boards of Loans at Home and of
NSF are clear that this is the only option available in order to preserve
value for creditors.  As the operations and activities of Loans at Home are
separate from the rest of the Group, the Board of NSF confirms that, having
now agreed certain waivers with the Group's lenders, the administration of
Loans at Home will have minimal impact on the rest of the Group's business.

Proposed redress methodology in guarantor loans

Following the FCA's detailed review of the Group's proposed redress
methodology for certain customers of its guarantor loans business, the Group
is continuing to work with the FCA on finalising the operational mechanics of
the scheme.  The board is hopeful that this will soon be finalised in order
to provide certainty for investors so that it can then proceed with the
Capital Raise that, if successful, will be used to fund customer redress as
well as strengthen the Group's balance sheet and transform its prospects.

Planned capital raise

The Group intends to complete a substantial capital raise as soon as
practicable and considering the regulatory developments detailed above, the
Group is in discussions with its lenders to support this effort. The Group's
largest shareholder, Alchemy Special Opportunities Fund IV L.P.('Alchemy'),
has confirmed its continued support for the proposed Capital Raise.
Alchemy's support remains subject to: an outcome of the Group's engagement
with its lenders that is acceptable to Alchemy; Alchemy's analysis of the
outcome of the Group's discussions with the FCA regarding the regulatory
position of the Group's divisions and the implications of that on (and
Alchemy's assessment of) the Group's business plan and financial projections;
and greater levels of certainty around redress and claims.

If successful, the Capital Raise will reduce high levels of gearing, fund the
payment of redress to certain customers of the Group and underpin the future
growth of its lending operations. Should the Capital Raise be unsuccessful or
take longer than expected to execute, then it is expected that the Group would
remain in a net liability position from a balance sheet perspective, would
breach certain borrowing covenants and as a result would likely not be able to
access further funding over the period of breach and would require additional
waivers from its lenders. In such circumstance, there would be a material risk
of the Group going into insolvency.  However, the Directors continue to
believe there is a reasonable prospect of resolving this position.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR. The person responsible for making this announcement is the Director of IR
and Communications.

 

 Non-Standard Finance plc                          +44 (0) 20 3869 9026

 Peter Reynolds, Director, IR and Communications
                                                   +44 (0) 20 7379 5151

 Maitland/AMO

 Neil Bennett

 Finlay Donaldson

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFLFVVVLILLIF