Supply@ME Capital plc (LON:SYME) updated its “captive funding” strategy to include the possibility of direct investment into a fintech bank.
The London-listed inventory monetisation company entered into an agreement with an Italian bank that envisages the signing of a commercial agreement to manage both the origination of new client companies and a multi-annual inventory funding plan as well as the execution of a first inventory monetisation transaction involving a portfolio of Italian client companies.
READ Supply@ME outlines strategic inventory funding agreement with new 'captive bank'
The plan is for Supply@ME to acquire up to 10% of the fintech bank from the Italian banking group, a level which is below the threshold requiring regulatory approval. An additional 10% of the fintech bank may be acquired at the option of Supply@ME within the following two years which would require an authorisation process through Italy’s central bank.
In April 2021, the fintech bank was valued at between €34mln and €50.6mln, Supply@ME revealed.
"We can now begin to structure the monetisation of the first group of Italian client companies. This is a key initiative for Supply@ME and we expect that it will serve as the basis for an ongoing and scalable inventory funding programme for client companies, starting in Italy. We believe that this will also provide further confidence to investors who have been awaiting the news of our first monetisation,” said Alessandro Zamboni, the chief executive officer of Supply@ME (SYME).
“We expect the agreement will create additional value for the company, given the opportunity to invest directly in a fintech bank whose portfolio will grow as Supply@ME completes further rounds of monetisation. This transaction reinforces the positioning of SYME as an innovative fintech business, via non-credit transactions, aimed at assisting with the working capital needs of SMEs and large corporates," he added.
Shares in Supply@ME were up 1.7% at 0.37p in the first hour of trading.