REG - Supply@ME Capital - Funding update

Supply@Me CapitalAnnouncement

10/02/2025 07:00

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RNS Number : 4941W  Supply@ME Capital PLC  10 February 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU, WHICH IS PART OF UNITED KINGDOM DOMESTIC LAW PURSUANT
TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK
MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS
DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

10 February 2025

Supply@ME Capital plc

(the "Company", "Supply@ME" or "SYME" and, together with its subsidiaries, the
"Group")

Funding update

 

SYME, the fintech business which provides an innovative fintech platform (the
"Platform") for use by manufacturing and trading companies to access Inventory
Monetisation© ("IM") solutions enabling their businesses to generate
cashflow, provides the following update regarding its current funding
position, in particular with reference to the on-going financing by The
AvantGarde Group S.p.A. (an entity ultimately beneficially wholly-owned and
controlled by Alessandro Zamboni, Chief Executive Officer of the Company)
("TAG").

Background

As part of the interim unaudited condensed consolidated financial statements
for the six month period ended 30 June 2024, which were released on 30
September 2024 (the "H1 2024 Interim Financial Statements"), the board of
directors of SYME (the "Board") considered it appropriate to prepare the
interim financial statements on a going concern basis, taking into account
material uncertainties which may cast significant doubt upon the Company's
ability to continue as a going concern. Details of these material
uncertainties can be found in note 4 of the H1 2024 Interim Financial
Statements.

The going concern statement included in the H1 2024 Interim Financial
Statements also stated that the Board believed that the continued delivery of
funds from TAG demonstrated the on-going commitment by TAG to support the
Group, and the ability to provide the funds due under its contractual
commitments with the Company, albeit on a delayed payment schedule. It further
stated that the Board was continuing to closely monitor the payments received
from TAG, and the representations made to the Directors by TAG, via Alessandro
Zamboni.

These representations include information as to the expected timing of the
future receipt of amounts due to the Group from TAG under the contractual
funding commitments currently in place, and the up-to-date actions that TAG is
putting in place to allow it to demonstrate its on-going commitment and
ability to support the Company and to provide the contractual payments.

Update on the on-going funding facilities with TAG

Amounts outstanding from TAG

Details of the amounts still outstanding to the Company from TAG are set out
below.

-      On 29 September 2023, the Company entered into a top-up unsecured
shareholder loan agreement with TAG, which was subsequently amended on 30
September 2024 (the "Top-Up Shareholder Loan Agreement"). Pursuant to this
agreement TAG agreed to provide the Company with a shareholder loan facility
of up to £3,500,000 to cover the Company's working capital and growth needs
up to 31 December 2025.

-      To date, the Company has issued draw down notices to TAG for a
total amount of £2,041,630 under the Top-Up Shareholder Loan Agreement. As at
the date of this announcement, no payments have been received from TAG in
respect of the amounts drawn down under the Top-Up Shareholder Loan Agreement
and the full amount of £2,041,630 remains due from TAG to the Company.

Amounts received from TAG during 2023 and 2024

In addition to the outstanding payments from TAG under the Top-Up Shareholder
Loan Agreement referred to above, during 2023 and 2024, TAG did perform
against the two other contractual funding commitments with the Group, albeit
on a delayed basis.

Over 2023 and 2024, a total of £2,800,000 was received by the Group from TAG
in respect of the following:

-     The £800,000 that was due to the Company from TAG in respect of the
unsecured working capital facility that was initially agreed on 28 April 2023
and subsequently amended on 30 June 2023. £250,000 of this amount was
received in cash during 2023 and the remaining £550,000 was received in cash
during 2024. This facility was repaid by the Company in March 2024, through
the issue of 1,500,000,000 new ordinary shares in the Company which were
issued to TAG in exchange for the repayment of the principal amount due; and

-     The £2,000,000 that was due to the Company in respect of the
receivable that was assumed by TAG as a result of the sale of 81% of TradeFlow
Capital Management Pte. Ltd completed on 30 June 2023. Of this amount,
£1,228,000 was repaid during 2023 and £772,000 was repaid during 2024. Of
the total £2,000,000 received, £1,341,000 was paid in cash, £238,000 was
received by way of offset against amounts owed by the Group to TAG and the
remaining £421,000 that was repaid by way of formal debt novation agreements
with specific suppliers whereby the debt held by the Group companies was
novated to TAG with no recourse to the Group companies.

Late payment interest

It should be noted that late payment interest has been charged in respect of
the late / outstanding payments from TAG. Over 2023 and 2024, a total of
£334,000 late payment interest was charged, of which £277,000 remained
outstanding at 31 December 2024.

On-going monitoring of the Company's funding situation by the Board

As required under the listing principles, the Board believes it has taken all
reasonable steps to establish and maintain adequate procedures, systems and
controls to enable it to comply with its obligations. As such, the Board has
continued to closely monitor the payments received from TAG and the on-going
representations made to the Directors by TAG, via Alessandro Zamboni. These
on-going representations have included up-to-date information as to the
expected timing of the continued future receipts of the amounts due to the
Company from TAG under the contractual funding commitments currently in place,
and the up-to-date actions that TAG is putting in place to allow it to
demonstrate their on-going commitment and ability to support the Company and
to provide the contractual payments.

The Board has also been monitoring any information available as to the
financial position of TAG. Details of the recent information the Company has
received from TAG in respect of its current financial position are set out
below:

-      The TAG financial statements for the year ended 31 December 2023
were prepared on a going concern basis by TAG, however due to specific current
circumstances, the auditors of TAG did not agree with this assessment. These
specific circumstances include certain material creditor positions relating to
TAG's historical strategic transactions, including the settlement of the 1AF2
Ltd secured bond (the "1AF2 Bond") issued on 21 July 2021. The 1AF2 bond had a
principal amount of €73.05 million and a security package which envisaged
the creation of a charge containing fixed charge(s), floating charge(s) and
negative pledge over 1AF2 Ltd and a TAG corporate guarantee up to €61
million. 1AF2 Ltd is fully owned by TAG. On 6 December 2024, an amount equal
to €40 million of the 1AF2 Bond, originally held by Eight Capital Partners
plc, has been sold to SFE Equity Investment S.A.R.L. ("SFE EI"). SFE EI a
related party of TAG through TAG's non-controlling ownership interest in the
parent company of SFE EI. While TAG is making progress, the settlement of the
full amount of 1AF2 Bond remains outstanding.

-      As a result of the circumstances described above, TAG has elected
to apply for a restructuring procedure as is allowable under the Italian
company law. Such procedure requires TAG to engage with its creditors in order
to propose and agree the restructuring of its debts with the assistance of
external advisors and, where applicable, the Italian courts. The aim of this
procedure is to give TAG an opportunity to restructure its liabilities and
continue operating, thus avoiding insolvent liquidation.

While the procedure outlined above is in effect, TAG's operations in the
ordinary course of business remain under the control of its sole director. TAG
has represented to the Company that this includes the Top-Up Shareholder Loan
Agreement set out above, together with any late payment interest due. TAG has
advised that it is scheduled to meet with the external advisors and the court
to confirm that the outstanding contractual funding commitments it has with
SYME can still be fulfilled outside of the debt restructuring process.

Considering the above representations from TAG, the Board continues to believe
the Company can be managed in a way to allow it to meet its on-going
commitments and obligations. This said, given the cash flow pressure the Group
is currently experiencing, the Board is actively exploring alternative funding
options and will update the market in this respect at the earliest
opportunity.

For the purposes of UK MAR, the person responsible for arranging release of
this announcement on behalf of SYME is Alessandro Zamboni, CEO.

Notes

SYME and its operating subsidiaries provide its Platform for use by
manufacturing and trading companies to access inventory trade solutions
enabling their businesses to generate cashflow, via a non-credit approach and
without incurring debt.  This is achieved by their existing eligible
inventory being added to the Platform and then monetised via purchase by third
party Inventory Funders.  The inventory to be monetised can include
warehoused goods waiting to be sold to end-customers or goods that are part of
a typical import/export transaction.

 

Contacts

Albert Ganyushin, Chairman, Supply@ME Capital plc,
investors@supplymecapital.com

 

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