AGM Statement

RNS Number : 8390F

GLI Finance Limited

30 April 2014

 

30 April 2014

                                                                     GLI Finance Limited

AGM Statement

GLI Finance Limited ("GLIF" or the "Company") is holding its Annual General Meeting at 3pm today. At the meeting, Patrick Firth, Chairman, will give the following statement:

The past year has seen significant progress made by our Company towards its goal of becoming a leading provider of SME finance through a variety of partnerships with alternative finance platforms. Each of the platforms is developing in accordance with its strategy and each has the potential to become a significant business in its own right. None of the businesses are looking to compete directly with the banks but rather to provide funding that the banks can no longer provide, either due to the complexity of the transaction or due to the amount of capital required. As such we believe that the opportunity for our platforms is significant and sustainable, thus the future development potential of our business is extremely exciting.

Alternative Finance Market Conditions

There is increasing interest in the alternative finance space, and in particular in "peer to peer" businesses. There are a significant number of investors now seeking to allocate funds to invest into and through alternative finance companies. This has driven up the valuation that companies expect to receive for investment in their businesses, however, having made its 10 investments in platforms over the last 18 months, GLIF will only make any further investments where we feel that the compelling value story remains. We continue to discuss potential transactions with a number of parties that would be complementary to our existing family of businesses, and continue to find that companies see value in working with the leading investor in alternative finance platforms on a strategic level, rather than taking a higher valuation from a financial investor.

CLO portfolio

Work continues on the proposal to float a fund, Fair Oaks Income Fund, for which GLIF's CLO portfolio will provide the initial portfolio. On listing our investment will be in shares of Fair Oaks Income Fund, at which point, for the first time since 2007, the Company will have no direct interest in any CLO investments, and the focus will be exclusively on building the loan portfolio originated through our platforms.

Raiseworks

Raiseworks operates an online direct lending platform that connects small businesses with institutional lenders looking to lend directly to private businesses. As has previously been flagged, our intention is to seek investors to capitalise the business. We believe that this process has the potential to position Raiseworks amongst the leading online SME lending platforms in the world, and to give GLIF the potential to put a significant proportion of our balance sheet to work within US SME loans.

FundingKnight

FundingKnight provides SME finance through crowd funding from a broad base of investors. The maximum loan size is GBP150k and the maximum term is five years. The loan book has continued to make strong progress, now more than five times the size that it was when we made our initial investment in July 2013.

Platform Black

Platform Black is a UK based peer-to-peer invoice trading and supply chain finance business. Its investor base is exclusively institutional, self-certified sophisticated, and high net worth investors, and these investors bid for tranches of invoices from 5% upwards through Platform Black's proprietary trading platform. It is seeing an encouraging level of new companies taking advantage of the flexibility of funding that the platform allows, and we would expect to see good growth prospects.

BMS Finance

BMS finances high growth SMEs, predominantly in the UK. Typically these businesses have up to GBP25m of revenue, but do not require a three-year track record of profits. The loans are two to three year senior secured amortising loans of GBP500k-GBP4.5m and in addition to the loan itself; BMS typically obtains a warrant or exit fee. The focus of the portfolio is business services and technology companies. Towards the end of 2013 BMS agreed a GBP15m matched funding facility with the Business Bank and it is expected that this money will start to be put to work in the first half of 2014.

Sancus

Sancus is an offshore peer-to-peer secured lender with significant permanent capital, allowing it to participate in all of the transactions originated. Its lending is bespoke, tailored to the individual transaction, and often complex. The loan book is growing rapidly, since the company opened for business in January, and it has an extremely strong pipeline of potential future transactions.

Finpoint

Finpoint Limited is a joint venture between CRX Services GmbH (the German company that owns the Finpoint brand and presence in Europe) and GLIF. The platform provides financial institutions with the opportunity to lend directly to SME's via an internet based platform that matches borrowers with banks and alternative lenders. A similar model to peer-to-peer but with larger loan sizes and a solely institutional focus, there are currently 15 lenders registered on the website.  London based, Finpoint Limited has recruited its initial staff and is now focused on growing its pipeline of business.

TradeRiver Finance

TradeRiver Finance is a non-bank online funding solution which finances trade, both cross-border and in the UK. The company provides businesses with finance to purchase goods and services through a convenient online platform. As an established business, TradeRiver has continued to deliver on its growth plans; the key driver for growth in the business will be to develop a broader range of intermediary introducers of business, now that GLIF's capital has provided the company with sufficient resources to fund their near term objectives.

European Receivables Exchange

European Receivables Exchange, trading as Dansk Faktura Børs, is an invoice discounting business, currently operating principally in Denmark but with the potential to broaden its reach across Europe. Having built a very successful business model, that transacts a large number of daily trades, the company has a wide array of potential opportunities, both in borrowers and lenders, to scale the business significantly and GLIF is working with the business on how best to exploit the multiple opportunities.

Proplend

Proplend is a secured peer-to-peer lender run by an experienced property team with a differentiated product. The company expects to focus on the UK commercial property market and loan sizes of typically between GBP100k and GBP5m and has a strong pipeline in which GLIF expects to participate.

CrowdShed

CrowdShed is creating a new multi-faceted approach to crowd funding, bringing together rewards and donations with equity and commercial debt opportunities. The company expects to launch the shed (physical space) with workshops as well as the reward platform in June 2014.

For further information, please contact:

Geoffrey Miller

GLI Finance Limited

[phone]

[phone]

Panmure Gordon

Dominic Morley

Fred Walsh

[phone]

Ed Berry

FTI Consulting

[phone]

 

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