REG - Supply@ME Capital - White-Label IM Agreement - funding secured

Supply@Me CapitalAnnouncement

03/01/2024 07:15

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RNS Number : 4420Y  Supply@ME Capital PLC  03 January 2024

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.

 

3 January 2024

 

Supply@ME Capital plc

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

White-Label IM agreement: funding secured with Banco BPM S.p.A to execute an
initial IM transaction

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, is pleased to announce that the Group has secured a commitment
provided by Banco BPM S.p.A. (the "WL Inventory Funder" or "BBPM") to fund an
initial IM transaction with an inventory value to be monetised up to
€10million of an existing client of BBPM (respectively the "WL Client
Company" and the "WL Transaction"). This commences the Group's overall
White-Label go-to-market strategy.

Background

On 29 September 2023, the Group stated, as part of the interim results
announcement, that it is now focusing its efforts on the following core
business lines:

·     IM transactions from the pipeline originated by the Group and
funded by third-party investors ("Open-Market IM"); and

·     IM deals with local commercial banks and their client companies
("White-Label IM"). In this regard, SYME explained that this route is expected
to allow the Group to scale its revenue in Italy, leveraging the balance sheet
and the client base of the WL Inventory Funder in specific supply chains. In
parallel, the Group continues to explore similar White-Label IM partnerships
in the UK.

The WL Transaction

BBPM is Italy's third largest financial services group in terms of assets; of
which over €100bn is accounted for through loans and advances to their
customers 1 . BBPM has a deeply rooted presence in the northern regions of
Italy, including those with the highest industrial concentration in Europe.

The achievement of the commitment for the WL Transaction is a key milestone
for SYME which involved the collaboration across a highly qualified working
group consisting of the dedicated functions of BBPM, the WL Client Company,
external legal specialists and an accounting team made up of two different Big
Four accounting firms in Italy, of which one is the auditor of the WL Client
Company.

Specifically, to deploy the first White-Label IM, BBPM, the WL Client Company,
the Group and a dedicated Stock Company (which is owned by the CH Trading
Hub 2 ) have signed a binding term sheet ("Commitment") (subject to the
finalisation of the relevant definitive commercial agreements between the
relevant parties) which envisages the delivery of an IM transaction with the
following key features:

-  the WL Client Company is within the Agrifood supply chain, being a
leading producer of the famous Italian cheeses;

-  the dedicated Stock Company will fund the WL Transaction through a
combination of the secured €8.5million bank debt from BBPM and €1.5million
of equity investment from the CH Trading Hub;

-  specific remarketers have been identified who will be directly engaged by
the Stock Company to optionally sell the inventory (up to €10million) in
specific circumstances. In turn, the remarketers could potentially be a
beneficiary of separate dedicated White-Label IM transactions in the future;
and

-  the WL Client Company has signed a commitment (up to €10million) to
become a remarketer of a potential client in SYME's pipeline which operates in
the same supply chain.

Following the signing of the Commitment, the working group is now focussed on
the delivery of the WL Transaction through the execution of the definitive
contractual agreements between the relevant parties.

With reference to the CH Trading Hub, which is owned by Société Financière
Européenne S.A. ("SFE"), it is worth noting that, as of today, Alessandro
Zamboni, the CEO of SYME Group, has, along with a number of other investors, a
personal non-controlling interest in SFE, with this entity acting as equity
capital partner provider for the CH Trading Hub. For this reason, the
Commitment, and the associated agreements between the Group and the dedicated
Stock Company that will be signed as part of the definitive commercial
agreements between the relevant parties ("Platform Agreements"), constitute a
material related party transaction for the purposes of DTR 7.3 and were,
accordingly, voted upon by the independent Directors (excluding Alessandro
Zamboni, who, in this case, constituted a "related party" (as such term is
defined in IFRS)), and such independent Directors consider this material
related party transaction in respect of the Commitment, and the associated
Platform Agreements, to be fair and reasonable from the perspective of the
Company and its Shareholders who are not a related party.

 

Alessandro Zamboni, CEO of SYME, said

"Achieving the Commitment from BBPM for our first White Label transaction is a
momentous milestone for the Group which demonstrates the value and
applicability of our proprietary Inventory Monetisation model for commercial
banks and their customer base.

"BBPM is the perfect partner for us to initiate and scale our White Label
business line. It's credibility and long-standing reputation as one of Italy's
foremost leading banking groups will enable us to bring our solution to a much
greater number of clients, providing a means for businesses to improve their
capital positions by offering access to funding based exclusively on the value
of their inventory."

 

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

Contact information:

Alessandro Zamboni, CEO, Supply@ME Capital plc, investors@supplymecapital.com

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.

 1  Source: BBPM Annual Accounts for the year ended 31 December 2022.

 2  Supply@ME has been collaborating with a group of private investors and
subject matter experts of working capital solutions to launch an independent
Swiss-based trading business (the "CH Trading Hub") to replace the
Cayman-based global inventory fund ("GIF"), previously advised by TradeFlow
Capital Management Pte. Ltd., in which the Company owns a minority interest.
The CH Trading Hub, owned by Société Financière Européenne S.A. ("SFE"),
is also expected to assume control of the independent Stock Companies from the
GIF once this restructuring is completed, to manage the overall trading
businesses using the Platform and the associated services provided by the
Group.

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