RE: SYME29 Oct 2020 12:12
A captive banking arrangement
Despite the coronavirus, Supply@Me is making headway. It says it has a new funding agreement with a captive bank.
“Supply@Me needs funders in order to monetise inventory,” explained Alessandro Zamboni, CEO of Supple@Me. “The demand pipeline is huge and we have been working on a strategic project to ensure unlimited funds.”
The new bank creates a funding machine for the new platform. It does not affect the balance sheet of the company but creates instead a funding partner to finance all the issuances from Supply@Me. This removes previous funding issues that investors have been historically concerned about. Supply@Me will remain independent and could potentially offer a new securitisation round, with the captive bank committed to subscribe to all the outstanding issuances, acting like a lender of last resort.
The bank can support Supply@Me Capital not only for its Italian client portfolio, but for international clients as well.
Since the big surge in August, the Supply@Me share price has come off slightly, shifting from its 52 week high of 1.1p to today’s 0.52. Note, however, that the 52 week high was back in March. Supply@Me shares fell off a cliff during the early stages of the pandemic, but seem to have rallied as activity has returned to European supply chains.
One to keep an eye on, as it is an innovative concept and we can see how this could readily plug into the existing ERP infrastructure. Hopefully we will hear more on this captive banking arrangement in weeks to come.