Finablr in urgent cashflow review due to NMC and coronavirus

(Sharecast News) - Finablr shares plunged by a third after the owner of Travelex said it was reviewing its liquidity and cashflow urgently under pressure from the NMC Health scandal and the coronavirus outbreak.
The payments and foreign exchange platform also said it would commission an independent investigation into its finances.

Finablr has been beset by doubts after a scandal at NMC Health, which divulged on Tuesday that it had $2.7bn of previously unreported debt. NMC Health founder BR Shetty is a shareholder in both companies through his BRS Ventures holding company.

Concerns mounted in January when Finablr revealed Shetty had pledged more than half of the company's shares as security against debt used to refinance the acquisition of Travlex in 2015.

The company said "adverse perceptions" that NMC's problems were relevant to Finablr had exacerbated strains on the company's cashflow position. Finablr said NMC's "management, operations and finances ... are independent and separate from those of the company".

The NMC scandal added to reduced demand for currencies and payments caused by the coronavirus, which has also restricted movement of physical currencies the company needs to serve customers. The recent downgrade to the bonds of Travelex and a liquidity squeeze added to pressure on its finances, Finablr said.

"These factors place significant constraints on the company's access to the daily liquidity the company needs to manage its business effectively and its ability to negotiate longer term financing," Finablr said.

The company's shares fell 33.8% to 14.86p at 08:11 GMT. The shares are worth less than 10% of their value at the start of 2020.

"Due to the fast-moving nature of the events and circumstances referred to above, the company is urgently seeking to complete its assessment of its liquidity and cashflow position and negotiate the steps that are necessary to address its short- and longer-term financing needs."

Finablr will appoint an independent adviser as soon as possible to help with its problems, it said. The company also said that after meetings with management, shareholders, auditors and the audit committee the board was told there were no undisclosed related-party transactions or financing arrangements.

"Nevertheless, to provide further assurance to the board and the market that this is the case, the board will shortly commission an independent investigation into the company's financial arrangements," Finablr said.