The Non-Standard Finance group (“NSF”) has completed a financial restructuring, which involved the sanction of a scheme of arrangement to provide certainty as to the extent of its liability for historical redress liabilities and culminated in the transfer of its operating business to a newly-incorporated group owned by its secured lenders.
The scheme of arrangement, which was proposed by Everyday Lending Limited, was the latest in a line of schemes to be proposed by consumer credit companies in recent years. Unlike some of those other schemes, which were reliant upon the raising of funding through the public equity markets to preserve the operating business, NSF’s scheme contained a toggle to a “take private” transaction (as was ultimately implemented) if a public equity raise could not be achieved.
In exchange for the transfer of NSF’s operating business, the secured lenders have released £70 million of their secured debt, extended the maturity date of the remaining debt by approximately four years and provided £40 million of additional liquidity. Of the new funding, £14 million will go to the partial payment of historical redress liabilities in accordance with the terms of the scheme.
NSF provides branch-based lending, through the Everyday Loans brand, to customers with limited or impaired credit history. Its parent company is Non-Standard Finance plc, which has a standard listing on the London Stock Exchange and will now take steps to implement an orderly wind-down following the transfer of its operating business.