Non-Standard Finance's largest shareholder 'no longer willing' to participate in equity raise

Alchemy, the largest shareholder in Yorkshire-based Non-Standard Finance (NSF) is no longer willing to take part in a proposed recapitalisation for the group, it has been revealed.
By Greg Wright
Published 18th May 2023, 09:03 BST

Toby Westcott, the Alchemy nominee non-executive director of the company, has also stepped down as a director with immediate effect, following the communication from Alchemy regarding its position.

In a statement, NSF said: “The board of Non-Standard Finance announces that Alchemy, the group's largest shareholder, has informed the company that it is no longer willing, in the current environment, to participate in the equity raise under the proposed recapitalisation on the previously notified proposed terms.”

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The group said it continues to press ahead with the scheme and both the proposed recapitalisation and the alternative transaction, but if the scheme is successful, the board now feels that the alternative transaction is a more likely outcome. The alternative transaction will involve the transfer of the group's business to the secured lenders in exchange for the release of a portion of their secured debt and the provision of a new lending facility. Part of the proceeds from this new lending facility would be used to fund the scheme fund and cover the costs of the scheme, NSF said.

Alchemy, Non-Standard Finance's largest shareholder, has informed the company that it is no longer willing, in the current environment, to participate in the equity raise under the proposed recapitalisation .Alchemy, Non-Standard Finance's largest shareholder, has informed the company that it is no longer willing, in the current environment, to participate in the equity raise under the proposed recapitalisation .
Alchemy, Non-Standard Finance's largest shareholder, has informed the company that it is no longer willing, in the current environment, to participate in the equity raise under the proposed recapitalisation .

The statement added: “ Both the alternative transaction and the proposed recapitalisation will secure the future of the Everyday Loans business and allow it to pursue its growth plans providing an invaluable service for its customers.

"However, the proposed recapitalisation will materially dilute the interests of NSF's existing shareholders, most likely to negligible value, unless they choose to participate in the equity raise, and the alternative transaction will unfortunately result in no recovery for NSF's shareholders.”

“The board is continuing to consider a range of options for the NSF plc ultimate parent company in the event the aternative transaction is implemented, but the most likely outcome is an orderly winddown following implementation of the alternative transaction. In the event that the scheme is not sanctioned by the court, or the scheme is sanctioned but the proposed recapitalisation and the alternative transaction both fail, then the group would remain insolvent and the most likely outcome would be a group-wide insolvency (most likely administration), also resulting in no return for current shareholders.”

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