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[email protected] outlines strategic inventory funding agreement with new 'captive bank' which it says is worth €8bn over five years

The fintech group said it has entered into a strategic agreement with and a leading European alternative investment firm and its shareholders, 1AF2 and The AvantGarde Group, to acquire the European bank

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[email protected] Capital PLC (LON:SYME) has unveiled the outline terms of a strategic inventory funding agreement for up to €8bn over five years with a new “captive bank”.

The fintech group said it has entered into a strategic agreement with and a leading European alternative investment firm and its shareholders, 1AF2 and The AvantGarde Group, to acquire the European bank.

The objective of the deal is to support the growth of the [email protected] platform, investors were told.

Until the regulatory and contractual processes have completed, the name of the bank and financial partner cannot be announced, inventory monetisation specialist [email protected] (SYME) added.

The company said oversight of the bank’s operational roles will reside with The AvantGarde Group, which will select its CEO, while governance supervision will be overseen by the financial partner.

SYME said the bank will:

  • Subscribe for all funding note issuances in line with the bank’s capital adequacy targets which have already been agreed
  • Provide funding across the [email protected] group’s international operating regions subject to country-specific banking licence restrictions
  • Co-investing with institutional investors in securitisation notes issued by the Platform

SYME said the bank’s indicative cumulative inventory funding targets are estimated to be €4bn by the end of 2021, rising to €8bn by end-2024.

It added the transaction would double inventory funding out to 2024 compared with the company’s initial business plan.

Near-term, this means SYME will exceed its 2020-21 EBITDA target, the company said in its stock exchange statement.

It will also result in a more rapid geographic expansion and an improvement in net fee margin, it added.

In the release, SYME said the bank partnership will "fast-forward" the funding of inventory monetisation for those client companies that do not form part of the initial Storm Harbour €300mln portfolio.

Alessandro Zamboni told investors: “This strategic bank partnership is a significant addition to the existing funding initiatives of the company. 

“Our objective has been to form partnerships that would enable us to beat our funding target, and this agreement achieves that.  Our business model is highly scalable subject to access to capital and to client companies.  With this new bank partnership and the other on-track initiatives, we now have capital and client companies. 

“We are moving into an economic season where recapitalisation of companies and other forms of capital injection, such as inventory monetisation, will be considered.  SYME has a service that is comparable to an equity recapitalisation with better funding costs and the absence of any equity dilution. 

“Our new Bank partnership will mean that we have two important key barriers to entry protecting us in this untapped inventory monetisation market: the unique capability to analyse and monitor inventory, and, a competitive cost of funding through which to monetise it.  We’re very pleased with this step forwards and are enthusiastic to push ahead with the next phase of SYME.”

Investors are encouraged to read the full release here

Quick facts: [email protected]

Price: 0.514 GBX

LSE:SYME
Market: LSE
Market Cap: £168.36 m
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on 22/9/20

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