LONDON: [email protected] Capital plc (SYME), has entered into a strategic agreement with a leading European Alternative Investment Firm and SYME’s shareholders, 1AF2 S.r.l. and The AvantGarde Group S.p.A. to acquire a bank in Europe.
The core objective of the transaction is to support and facilitate the rapid growth of the [email protected] platform, with the full support of the Central Bank within that jurisdiction.
As part of the Agreement, [email protected] will give the Bank pre-emption rights to invest in each securitisation note issue and other funding programmes, to support the Platform as it grows. In return, the Bank will provide up to €8 billion of funding over five years, to support inventory funding across all of SYME’s international operations.
The Financial Partner has committed to recapitalise the Bank immediately following the completion of the Central Bank’s regulatory banking authorisation process.
The Agreement delivers on the following strategic objectives:
– the Bank will remain independent, owned by the Financial Partner and the Co-investors. [email protected] will not be a Bank shareholder and it has no costs relating to the transaction. Control of key operational roles will be given to The AvantGarde Group who will be responsible for selecting the Bank’s CEO, whilst governance supervision will be overseen by the Financial Partner
– the Bank will provide “banking-as-a-service” to [email protected] in relation to subscribing to all funding note issuances in line with the Bank’s capital adequacy targets which have already been agreed; funding across [email protected] Group’s international operating regions, subject to country specific banking licence restrictions, and co-investing with institutional investors in securitisation notes issued by the Platform, in order to provide additional funds for inventory monetisation, in accordance with the Company’s multi-channel funding strategy
– the Bank’s indicative cumulative inventory funding targets are estimated at:
o €4bn by the end of 2021
o €5.5bn end 2022
o €7bn end 2023
o €8bn end 2024
– the funding costs to [email protected] will be lower than the current costs borne by the Platform for its “open funding” securitisation
– the Bank will also be the “partner and banker of trust” for SYME, whereby all bank accounts set up for inventory monetisation transactions will be held at the Bank. This will serve to reinforce monitoring processes, digital integration and security
– the Bank can hold up to 2% of SYME share capital, including purchases through the market subject to MAR and other regulatory approvals
The impact of the Agreement on the current business plan of [email protected] is transformational. The completion of the acquisition of the Bank will facilitate a major increase in the quantum and speed of the Platform’s estimated capital inflows for inventory monetisation, since securitisation notes and other funding structures can now be subscribed by SYME’s partner Bank.
Alessandro Zamboni, SYME CEO, commented “This strategic Bank partnership is a significant addition to the Company’s existing funding initiatives. Our objective has always been to form partnerships that would enable us to exceed our funding targets, and this agreement achieves that at one stroke. 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 environment where recapitalisation of companies and other forms of capital injection, such as inventory monetisation, will need to be considered. SYME provides 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: a unique capability to analyse and monitor inventory, and a competitive cost of funding through which to monetise it. We’re delighted with this big step forward and are enthusiastic to push ahead with the next phase of SYME.”
[email protected] enables businesses to generate cashflow, without incurring debt, by monetising their existing stock.