NSF.L Regulatory News (NSF)

Non-Standard Finance plc

('Non-Standard Finance', 'NSF' or the 'Company')

Update on scheme of arrangement ('Scheme'), Delisting and Directorate Change

23 June 2023: NSF announces that the Scheme was sanctioned yesterday by the Court. As previously announced, the Scheme is part of a broader transaction to restore the Group's balance sheet, fund the partial payment of redress claims under the Scheme and return Everyday Loans (branch-based lending) to profitable trading.

The sole remaining condition to the effectiveness of the Scheme is the funding of the Scheme Fund through the proceeds of either the Proposed Recapitalisation or the Alternative Transaction, both of which have been described in previous announcements. Following significant additional work to test the viability of the Proposed Recapitalisation without the participation of Alchemy, the Group's largest shareholder, in the equity raise under the Proposed Recapitalisation, the Board of NSF has regretfully concluded that the Proposed Recapitalisation is not capable of implementation.

As a consequence, in order to ensure that the Scheme becomes effective, the Board has made the decision that the Alternative Transaction should be implemented instead of the Proposed Recapitalisation. As a reminder to Shareholders, the Alternative Transaction will involve the transfer of the Group's business to the secured lenders in exchange for the release of a portion of their secured debt and the provision of a new lending facility. Part of the proceeds from this new lending facility would be used to fund the Scheme Fund and cover the costs of the Scheme.

While the Alternative Transaction will secure the future of the Everyday Loans business and allow it to pursue its growth plans providing an invaluable service for its customers, it will unfortunately result in no recovery for NSF's shareholders. The Board expects the Alternative Transaction to be implemented by the end of June 2023 or in early July 2023.

The most likely outcome for Non-Standard Finance plc, as the ultimate parent company of the Group, is an orderly winddown following implementation of the Alternative Transaction. To facilitate this process, Non-Standard Finance plc intends to take steps to cancel the listing of its ordinary shares (the "Shares") on the standard segment of the Official List of the FCA and cancel the admission to trading of the Shares on the Main Market for listed securities of the London Stock Exchange (the "Delisting"). Formal notice of any Delisting, including the proposed date of any Delisting, will be set out in a separate announcement in due course.

In light of the above, independent non-executive director Niall Booker has decided not to stand for re-election as an independent non-executive director, or to stand for election as non-executive chairman, at the Company's 2023 Annual General Meeting (the "AGM") which is to be held at 1 p.m. (London time) today. Niall will stand down from the Board following the AGM.

Jono Gillespie, Group Chief Executive, said:

"We are pleased that the Scheme has been sanctioned by the Court, which is a critical milestone in restoring the Everyday Loans business to financial health. While we are very disappointed that it has not been possible to carry out the equity raise as planned, we are grateful that - with support from our secured lenders - we prepared a fall-back transaction for this exact eventuality. We will now take steps to implement that fall-back transaction, which will allow the Group to grow and develop the Everyday Loans business, continue to provide much needed funding solutions for customers, and protect the position of the Group's employees."

Unless otherwise defined, capitalised terms within this announcement shall have the same meaning as those contained within NSF's announcement dated 17 March 2023.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. The person responsible for arranging the release of this announcement on behalf of Non-Standard Finance plc is Sarah Day, Chief ESG Officer and Group Company Secretary.