Distrib. Fin. Regulatory News (DFCH)

14 August 2020

Distribution Finance Capital Holdings plc("DFC", "DF Capital" or the "Company" or together with its subsidiaries the "DFC Group")

Annual General Meeting, Timing of Interim Results, Rescheduling of loan repayment

The Company announces today that its earlier postponed Annual General Meeting ("AGM") will be held on 30 September 2020, and that it also intends to announce its Interim Results for the Financial Year ending 31 December 2020 on that day.

In addition to sharing its Interim Results with Shareholders at the AGM, the Company will also share its medium-term business plan through to 2023, in what it anticipates will be full knowledge of a decision on its banking licence application from the Prudential Regulation Authority.

The Company also announces today that it has agreed terms with TruFin PLC ("TruFin") to reschedule the final loan repayment that falls due on 1st December 2020, pursuant to the unsecured loan agreed between the Company and TruFin dated 29th May 2018, agreed when DFC was a subsidiary of TruFin.

As detailed in the Company's AIM Admission Document, the inter-company loan accrued interest at a rate of 5% per annum, and (i) £5,000,000 was repayable by 1 December 2019; (ii) £5,000,000 was repayable by 1 June 2020; and (iii) 8,868,219.18 is repayable by 1 December 2020, in each case, together with any accrued but unpaid interest. In accordance with this agreement, and following its demerger from TruFin, the Company repaid the first two instalments of the loan on 1 December 2019 and 1 June 2020.

The rescheduling of the third and final loan repayment allows the Company, should the outstanding loan balance not be repaid in full on 1 January 2021, to make phased payments from 1st January 2021 over nine equal interest-bearing instalments. In consideration for extending the term of the loan, the Company has agreed an increase in interest rate to 10% on the outstanding balance from the execution date for the balance of 2020. The Company has the right, but not the obligation, to repay the outstanding balance on 1 January 2021 in which case no further interest would accrue. After 1 January 2021, the Company may repay the loan with the written agreement of both parties. Should the Company not repay the facility on 1 January 2021, then interest would accrue over the remaining nine months on the declining balance at 12% per annum. A transaction fee is also payable to TruFin on exit of the loan, of £180,000.

On 7 August 2020, the Company announced that following the completion of certain re-organisation steps by Mid-September, it expects to receive notification of the PRA's decision in respect of its banking licence application by the end of September. The re-scheduling of the TruFin loan into 2021 would allow the Company greater flexibility in this context.

As both TruFin and the Company have a shareholder in common owning over 30% in both companies, TruFin is deemed under the AIM Rules to be a related party of the Company, and the amendment to the loan agreement with TruFin is deemed to be a related party transaction under the AIM Rules. The Independent Directors of the Company consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Carl D'Ammassa, Chief Executive Officer commented: "We are pleased to receive TruFin's support as a long term lender to the Group. The reschedule of the loan repayment allows the eventual transition of our funding model. We look forward to sharing details of our forward plans, which we hope will be as a bank, with shareholders at the AGM".

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