€8bn Funding12 Oct 2020 12:16
How often have you read an RNS like that??
The core objective of the transaction is to support and facilitate the rapid growth of the Supply@ME platform, with the full support of the Central Bank within that jurisdiction.
As part of the Agreement, Supply@ME 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 €8bn 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 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 Supply@ME 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 Central Bank regulatory approval processes relating to the acquisition of the Bank are underway with the support of the local banking regulator.
However, until such regulatory and contractual processes have been completed, the parties have stipulated that the name of the Bank and Financial Partner cannot be announced.
The Financial Partner is a regulated investment manager in Europe which operates in the private equity and private debt markets. It has raised and invested more than €2 billion from institutional and retail investors.
Following this significant upgrade to funding, through its "banking as a service" strategic partner, SYME will be able to accelerate the funding initiatives previously announced as follows:
- the Bank partnership will fast-forward the funding of inventory monetisation for those client companies which do not form part of the initial StormHarbour €300m portfolio
- it will deliver additional inventory funding in the UK working together with its UK capital markets partner on the first portfolio of UK Client companies
- it will enable improvements to the self-funding agreements being negotiated with two Italian banks, to create more synergies and integrations with SYME's new partner Bank
- the Company can now analyse new financing structures using direct borrowing lines from the Bank to monetise inventory (and consequently increase monetisation to above €8bn), whereby securitisation notes could be structured in tranches (a senior lower risk tranche for institutional investors, and, a junior first-loss high
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