NON-STANDARD FINANCE PLC (Alliance News) - Non-Standard Finance PLC on Friday said it will wind-down as it warned shareholder value will be wiped out by a plan to shore up the future of its Everyday Loans business.
Shares in Non-Standard Finance plunged 53% to 0.082 pence each in London on Friday morning.
The Wakefield, West Yorkshire-based consumer lending firm said that a proposed recapitalisation effort will not be possible without the participation of Alchemy, its largest shareholder.
Alchemy said in May that it was not willing in the current financial environment to participate in a fundraise.
Non-Standard Finance has said that an alternative transaction will be implemented instead of the recapitalisation, and that it will involve the transfer of the group's business to secured lenders. In exchange, a portion of debt will be released and there will also be a provision of new lending.
The company expects this alternative transaction scheme to be implemented either by the end of June or in early July.
The company said that the proceeds from this would be used to finance a scheme of arrangement to settle compensation claims from customers in relation to loans provided by Everyday Loans.
The scheme of arrangement was sanctioned yesterday by a court.
Non-Standard Finance said that the alternative transaction would secure the future of the Everyday Loans business.
"The most likely outcome for Non-Standard Finance PLC, as the ultimate parent company of the group, is an orderly wind down following the implementation of the alternative transaction," said the company.
Non-Standard Finance said it intends to cancel the listing of its ordinary 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 company said this would result in no recovery for Non-Standard Finance's shareholders.
Chief Executive Jono Gillespie said: "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 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."
By Will Neill, Alliance News reporter
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