14.08.20

DF Capital Loan Amendment


 

14 August 2020

TruFin plc
("TruFin" or the "Company")

DF Capital Loan Amendment

TruFin announces that it has agreed with Distribution Finance Capital Ltd ("DFC") to reschedule a final loan repayment by DFC to TruFin that falls due on 1 December 2020, pursuant to an unsecured loan agreed between the Company and DFC dated 29 May 2018 (and subsequently amended on 11 April 2019), when DFC was a subsidiary of TruFin (the "Loan").

The terms of the Loan were i) an interest rate of 5% per annum; (ii) £5,000,000 repayable by 1 December 2019; (iii) £5,000,000 repayable by 1 June 2020; and (iv) £8,868,219.18 repayable by 1 December 2020, in each case, together with any accrued but unpaid interest.  In accordance with the agreement, and following its demerger from TruFin, DFC repaid the first two instalments of the Loan on 1 December 2019 and 1 June 2020.

The rescheduling of the third and final repayment of the Loan permits DFC, should the outstanding balance of the Loan not be repaid in full on 1 January 2021, to make phased payments from 1 January 2021 over nine equal interest-bearing instalments, such that the Loan will be repaid in full by September 2021. In consideration for extending the term of the Loan, the following amendments have also been agreed:

  • an increase in the interest rate to 10% per annum up to and including 31 December 2020;
  • an increase in the interest rate to 12% per annum from 1 January 2021;
  • a transaction fee of £180,000 payable to TruFin on final repayment of the Loan;
  • the outstanding balance of the Loan plus accrued interest may be repaid by DFC on 1 January 2021.  After 1 January 2021, DFC may repay the loan early with the written agreement of both parties; and
  • the Loan may be sold, assigned or pledged by TruFin without the consent of DFC (so long as it would not materially affect the likelihood of DFC's bank licence being granted or the continuation of the bank licence).

On 7 August 2020, DFC announced that following the completion of certain re-organisation steps by mid-September, it expects to receive notification of the PRA's decision regarding its banking licence application by the end of September 2020.  The re-scheduling of the Loan into 2021 allows DFC greater flexibility in this context.

As both TruFin and DFC have a shareholder in common owning over 30% in both companies, DFC is deemed under the AIM Rules to be a related party of TruFin, and the amendment to the Loan is deemed to be a related party transaction under AIM Rule 13.  The Independent Directors of the Company (being Steve Baldwin, Penny Judd and Paul Dentskevich) consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

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