Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://www.bloomberg.com/news/articles/2020-03-31/finablr-s-exchange-business-said-to-default-on-300-million-loan
"UAE Exchange, set up by the founder of embattled NMC Health Plc, defaulted on about $300 million of foreign-exchange loans, dragging some of Wall Street’s top banks into the widening scandal, according to people familiar with the matter.
Lenders including Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Commercial Bank of Dubai PSC arranged the facility, the people said, asking not to be identified because the matter is private. The borrowings haven’t been repaid due the mounting problems surrounding UAE Exchange’s owner Finablr Plc, the people said."
Even worse - its not AIM but (was) Main Market listed.
I have repeatedly pointed out the payment / processing problems at UAE Exchange for several weeks - below is the link again.
Now everyone knows why.
https://twitter.com/search?q=%22uae%20exchange%22&src=recent_search_click&f=live
It is only for certain selected Spanish and Italian shares as their financial regulators decided on this.
Not seen any FCA announcement re UK shares.
Press article:
https://www.arabianbusiness.com/comment/442800-nmc-who-knew-what-when
"All eyes are now on UAE Exchange, a subsidiary of Finablr, the London-listed financial services holding company owned by NMC’s BR Shetty. Sources told us off the record they had speculated that Shetty was “propping up NMC financially with cash in UAE Exchange. If that’s what’s going on, it’d be a massive, massive problem,” they said. UAE Exchange did not respond to requests for comment.
The speculations came just two days after it confirmed it was experiencing delays in money transfers, particularly in the UK, blaming them on an alleged cyber-attack."
I hope for that persons sake they are not investing their own money, or money for anyone else. If they look for "opportunities" on the basis of that Twitter post they will get cleaned out.
Press has now picked up on the payments problems at UAE Exchange
https://www.khaleejtimes.com/business/uae-exchange-responds-to-delays-in-funds-transfers-from-customers
".. facing operational challenges in remitting funds to certain countries because it takes longer time than usual.. "
Article does not make clear at all why they are having these problems in making payments for clients.
.. that it wasn't suspended after today's RNS.
The company stated its trying to assess its current liquidity and cashflow, situation is fast-moving etc, "significant constraints" on daily liquidity, "liquidity squeeze at both Group and operational business level" etc.
Usable cash of $486.2m at 1H 2019
Where's that ?
It should be - if there are significant doubts over the company's liquidity and access to working capital for day to day operations it should be suspended.
When a company goes public they are required to satisfy a minimum of 12 months sufficient working capital . That seems in doubt here based on the RNS.
One of the key people the board relied on for this reassurance was Shetty himself ... "promoter shareholders"
https://gulfnews.com/business/markets/investors-delay-bids-for-uae-exchange-centre-holding-company-1.70333216
"Another company said it has decided not to bid at all for the Finablr stake. It was particularly interested in acquiring the UAE Exchange Centre network, which has a wide reach in the Gulf and India.
“There would have been synergies with our own money exchange operations,” said an official there. “But now, it is best to hold back.”"
It seems like all these recent payment problems by customers on Twitter were a signal that there were underlying issues. Problem they have now is that people will not risk using them when they see the news - easy to just use another remittance / payments provider. Why risk it.
https://twitter.com/search?q=%22uae%20exchange%22&src=recent_search_click&f=live
Usable cash of $486.2m at 1H 2019
Why are they facing a liquidity squeeze after a relatively short period of disruption
"Following further discussions with the Company's executive management, promoter shareholders, independent auditors, and in light of meetings of the Audit Committee, the Board has been reassured that the Company has no undisclosed related-party transactions or unrecorded on or off-balance-sheet financing arrangements"
So they asked Shetty if everything was fine and he said it was (?!) ... question is why has the board been asleep for so long. An independent investigation could and should have been started weeks ago.
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/FIN/14458212.html
Liquidity ...
Scroll down and go back a few months - do you find similar clusters of payments problems?
https://www.ariva.de/XS1577963306/chart?boerse_id=1&t=3years
Seems to be indicating a spread of c.20-38 ie a discount of 80-62% vs par
Read the recent messages here about delays in processing cash transfers
https://twitter.com/search?q=%22uae%20exchange%22&src=recent_search_click&f=live
Also note that the B2B division also has some Travelex "revenue/business" in it - not sure how much as not seen it quantified anywhere. It seems to be that there is a share of revenue in B2B from conventional contracts e.g. Travelex sources FX for corporate customers etc. That is no reported under Consumer FX but B2B.
Just bear that in mind also.