TIDMSYME
RNS Number : 4684E
Supply @ME Capital PLC
30 June 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU, WHICH IS PART OF UNITED
KINGDOM DOMESTIC LAW PURSUANT TO THE MARKET ABUSE (AMMENT) (EU
EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR)
IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
30 June 2023
Supply@ME Capital plc
(the " Company " or " SYME ")
TradeFlow Restructuring
Notification of Transaction of a Person Closely Associated
SYME, the fintech business which provides an innovative fintech
platform (the "Platform") for use by manufacturing and trading
companies to access Inventory Monetisation(c) ("IM") solutions
enabling their businesses to generate cashflow, today announces
that, further to its announcement on 24 March 2023 entitled "Board
changes and TradeFlow update", it will restructure the ownership of
TradeFlow Capital Management Pte. Limited (" TradeFlow ") (the
"TradeFlow Restructuring") to better serve the needs of SYME's
client companies and funders of both businesses, and to create
value for shareholders of the Company (the "Shareholders").
Key highlights
-- SYME will reduce its ownership in TradeFlow from 100% to 19%
by selling 81% of the issued share capital in TradeFlow to Tom
James and John Collis (the "Buyers"), creating a clear separation
between SYME's IM fintech Platform and TradeFlow's regulated fund
management business.
-- This separation is aimed at removing any potential future
conflicts of interest between the two businesses and associated
regulatory and commercial hurdles, which will in turn improve the
growth prospects of both businesses.
-- The consideration for SYME's 81% stake in TradeFlow will be
GBP14,386,100 (the "Cash Quantum") of which GBP12,386,100 will be
netted off against potential future amounts owed by SYME to the
Buyers under the terms of an earn-out letter relating to the
original acquisition of TradeFlow on 1 July 2021 (the "TradeFlow
Acquisition").
-- SYME's major shareholder, The AvantGarde Group S.p.A.
("TAG"), will assume the obligation of the Buyers to pay SYME the
remaining GBP2,000,000 of the Cash Quantum (the "TAG Amount") by
way of a novation. The TAG Amount will be repaid by TAG to SYME in
multiple tranches, with the final tranche being payable by 31
January 2024. In consideration for assuming the GBP2,000,000
obligation of the Buyers, TAG will acquire 1,026,525,520 existing
ordinary shares of nominal value GBP0.00002 each in the capital of
SYME ("Ordinary Shares") from the Buyers.
-- The TAG Amount will be offset against the current obligations
of TAG under the English law governed fixed term unsecured working
capital loan agreement that was entered into by the Company and TAG
on 28 April 2023, as amended on 30 June 2023 (the "TAG Unsecured
Working Capital Loan Agreement") and reduce the obligations under
the TAG Unsecured Working Capital Loan Agreement to up to
GBP800,000.
-- The acquisition of the 1,026,525,520 existing Ordinary Shares
by TAG from the Buyers will not create any dilution to existing
Shareholders and the deemed price per Ordinary Share to be acquired
from the Buyers is approximately 0.195 pence, approximately 50%
above the closing price on 29 June 2023 of 0.13 pence per Ordinary
Share.
-- Additionally, TradeFlow will enter into a three-year
white-label licence agreement with Supply@ME Technologies S.r.l., a
wholly owned subsidiary of SYME, with respect to use of the
Platform, on a non-exclusive basis and limited to the Asia-Pacific
("APAC") region, for a total consideration of GBP1,000,000 payable
over a three-year period.
Background to the TradeFlow Restructuring
Original strategic positioning
Pursuant to the acquisition agreement between the Company and
the then shareholders of TradeFlow, dated 21 May 2021, the Company
acquired TradeFlow on 1 July 2021 for a total accounting
consideration of GBP7.1 million, split between cash consideration
of GBP4.0 million and GBP3.1 million in equity consideration.
The TradeFlow Acquisition enabled SYME to further its offering
for the supply chain industry by enabling the Company to design an
end-to-end IM service, including monetising of both inventory
"in-transit" inventory (initially, commodities), and warehoused
goods.
Market evolution
In recent months, the Company's Board has noted an evolution in
the regulation of the fund management industry. The Monetary
Authority of Singapore, Singapore's financial regulator, has
approved that TradeFlow should separate its licensed fund
management activities from the rest of the TradeFlow business.
In light of these market developments, the Company and TradeFlow
have mutually agreed that it is in the best interests of
Shareholders to separate the Platform (fintech business) from the
fund management activities (regulated business), in order to
clarify SYME's market position and improve the growth prospects for
both businesses.
This separation is expected to create value for Shareholders by
eliminating any perception of conflicts of interest between the two
businesses and providing both businesses with greater commercial
opportunities through the clear differentiation of responsibilities
of the individual entities.
The Company has also agreed to trigger the liquidation process
of the Global Inventory Fund ("GIF"), being the two segregated
portfolio funds currently owned by Apex Group and advised by
TradeFlow. The Company has identified an alternative structure for
the management of the Stock Companies, the trading companies which
undertake the IM transactions utilising the Platform. This
alternative structure is in line with recent market practices
regarding the management of similar trading businesses and will
ensure seamless business continuity. The Company will provide the
market with appropriate updates in due course.
Continuing benefits
In addition to responding to the market evolution, the Company's
Directors believe that the TradeFlow Restructuring will be in the
best interests of both the Company and TradeFlow as both businesses
will continue to benefit from the separate focus and domain
expertise. For this reason, with the aim to leverage the TradeFlow
eco-system of partners, TradeFlow will licence and make available
the Company's Platform as a white-label offering to potential
third-party asset managers/inventory funders in the APAC
region.
TradeFlow Restructuring SPA
Pursuant to the terms of an English law governed share purchase
agreement between the Company and the Buyers, dated 30 June 2023
("TradeFlow Restructuring SPA"), the Company agreed to sell the 81%
of TradeFlow's issued share capital (the "Sale Shares") to the
Buyers, and the Company will retain 19% of TradeFlow's issued share
capital (the "Minority Shares").
The total Cash Quantum payable by the Buyers under the TradeFlow
Restructuring SPA for the Sale Shares is GBP 14,386,100 .
Of the Cash Quantum, GBP 12,386,100 will be netted off against
potential future amounts owed by SYME to the Buyers under an
earn-out side letter entered into by the Company and the Buyers in
connection with the TradeFlow Acquisition Agreement in May 2021
(the "Earn-Out Side Letter").
The remaining GBP2,000,000 of the Cash Quantum was novated from
the Buyers to TAG on the terms of a novation deed entered into
between the Company, the Buyers and TAG (see "Debt Novation Deed"
below).
The TradeFlow Restructuring SPA contains:
-- an "anti-embarrassment" clause, such that, if there is a
change of control of TradeFlow in the two-year period from the date
of TradeFlow Restructuring SPA as a result of a further sale of the
Sale Shares by the Buyers, the Company may be due a proportionate
additional amount of consideration from the Buyers; and
-- an acknowledgment by each of the parties thereto that the
TradeFlow Restructuring SPA supersedes and extinguishes any of the
rights or obligations set out in the Earn-Out Side Letter, which is
deemed terminated upon completion of the TradeFlow restructuring
without any further liability for any of the parties to the
Earn-Out Side Letter.
The Company gave limited warranties to the Buyer concerning
title, capacity, and ability to transfer the Sale Shares in the
TradeFlow Restructuring SPA.
The TradeFlow Restructuring SPA also contains a call option
granted by the Company to the Buyers, which will allow the Buyers
to purchase the Minority Shares from the Company (the "Call
Option"). The Call Option is exercisable over a maximum of three
tranches. The amount payable on exercise of the Call Option will be
calculated with reference to the higher of twice the implied
valuation of the Cash Quantum and twice the then fair market value
of TradeFlow determined by an independent valuer. In the event that
there is a change of control of the Company, the amount payable on
exercise of the Call Option will be 90% of the then fair market
value.
Debt Novation Deed
Pursuant to the terms of an English law governed debt novation
deed entered into between the Company, the Buyers and TAG on 30
June 2023 (the "Debt Novation Deed"), the TAG Amount by way of
novation.
Pursuant to the Debt Novation Deed, TAG has agreed with the
Company to settle the TAG Amount in three tranches:
-- GBP500,000 on 30 June 2023;
-- GBP1,000,000 on 30 September 2023; and
-- GBP500,000 on 31 January 2024.
TAG is ultimately beneficially wholly-owned and controlled by
its sole director, Alessandro Zamboni, Chief Executive Officer of
the Company.
The entry by the Company and TAG into the Debt Novation Deed
constitutes a material related party transaction for the purposes
of DTR 7.3 and was, accordingly, voted upon by the independent
Directors (being the Board other than Alessandro Zamboni, who
constituted a "related party" (as such term is defined in IFRS))
(the "Independent Directors").
In exchange for acquiring the TAG Amount from the Buyers, TAG
has agreed to acquire 1,026,525,520 Ordinary Shares from the Buyers
at a deemed price per Ordinary Share of 0.195 pence, being 50%
above the closing price on 29 June 2023 of 0.13 pence per Ordinary
Share. The acquisition of the 1,026,525,520 existing Ordinary
Shares by TAG from the Buyers will not create any dilution to
existing Shareholders.
Platform Licence Agreement
The Group and TradeFlow have also entered into an Italian law
governed Platform licence agreement between Supply@ME Technologies
S.r.l and TradeFlow, dated 30 June 2023 (the "Platform Licence
Agreement"). Pursuant to the Platform Licence Agreement, TradeFlow
has been granted a non-exclusive white-label licence for an initial
three-year period to use the Group's proprietary web-based
technology Platform on a non-exclusive basis and limited to the
APAC region. The consideration for which is a payment by TradeFlow
to Supply@ME Technologies S.r.l of GBP1,000,000 over the duration
of the initial three-year period.
Deed of Amendment to TAG Unsecured Working Capital Loan
Agreement
On 30 June 2023, the Company and TAG entered into an English law
governed deed of amendment to the TAG Unsecured Working Capital
Loan Agreement (the "Deed of Amendment to TAG Unsecured Working
Capital Loan Agreement"), which amended and restated clause 2.2 of
the TAG Unsecured Working Capital Loan Agreement, confirming that
the obligations of TAG to pay, pursuant to clause 2.1 thereof, to
the Company up to GBP2,000,000 in multiple tranches, with the final
tranche being payable by 31 January 2024 , shall be netted-off
against the TAG Amount. The resulting impact of the Deed of
Amendment to TAG Unsecured Working Capital Loan Agreement is:
-- to reduce the amount drawable by the Company from TAG
pursuant to the TAG Unsecured Working Capital Loan Agreement to an
amount of up to GBP800,000 payable by TAG to the Company by 21 July
2023, save to the extent that prior to 21 July 2023, as specified
in the TAG Unsecured Working Capital Loan Agreement, the Company
receives unrestricted cash amounts from the exercise of any
outstanding Warrants and/or alternative equity, debt or hybrid
financing and such unrestricted cash amounts are in the opinion of
the Board sufficient to enable the Company to meet the Group's
working capital obligations under the Prospectus Regulation Rules;
and
-- to replace the remaining GBP2,000,000 from the TAG Unsecured
Working Capital Loan Agreement, also payable in multiple tranches,
with the same amount payable to the Company by TAG in accordance
with the Debt Novation Deed. The TAG Amount will not be repayable
by the Company and will not incur interest.
The entry by the Company and TAG into the Deed of Amendment to
TAG Unsecured Working Capital Loan Agreement constitutes a material
related party transaction for the purposes of DTR 7.3 and was,
accordingly, voted upon by the Independent Directors.
The Deed of Amendment to TAG Unsecured Working Capital Loan
Agreement comprises a material related party transaction under DTR
7.3, and the Independent Directors consider the entry by the
Company into the Debt Novation Deed as a material related party
transaction to be fair and reasonable from the perspective of the
Company and its Shareholders who are not related parties.
Material related party transactions
The Debt Novation Deed and the Deed of Amendment to TAG
Unsecured Working Capital Loan Agreement comprise a series of
material related party transactions under Disclosure Guidance and
Transparency Rule 7.3, and the Directors (independent of Alessandro
Zamboni, a "related party" (as such term is defined in UK-adopted
International Financial Reporting Standards)) consider those
material related party transactions to be fair and reasonable from
the perspective of the Company and its Shareholders who are not a
related party. Accordingly, this announcement is made under and in
compliance with Disclosure Guidance and Transparency Rule
7.3.8.
Alessandro Zamboni, CEO of SYME commented:
"Since joining forces with SYME 18 months ago, the TradeFlow
team has made a significant contribution to the Company's progress.
By combining our shared expertise, we built the first inventory
real asset alternative fund, which can now evolve into a more
flexible and open structure. This is a necessary reconfiguration,
rather than a partnership split, with the decision informed by our
proactive engagement with potential inventory funders and
regulators."
"We continue to believe in the market positioning of TradeFlow
and its risk transformation methodology to support import/export
commodity transactions in the small-to-medium enterprise space.
SYME continues to explore opportunities for the integration of its
unique IM - warehouse based - facility with in-transit and
cross-border inventory programmes, in line with our vision to
support businesses at every stage of the inventory lifecycle. "
Tom James and John Collis, Executive Directors of TradeFlow
commented:
"Based on our discussions with the Board and feedback from
potential funders, it's clear that this reconfiguration is in the
best interests of all parties and will provide multiple benefits
for both organisations. We will continue to work closely with the
team at SYME to develop its white-label offering in the APAC
region."
Legal notices:
A supplementary prospectus (the "Second Supplementary
Prospectus") has been prepared in connection with the TradeFlow
Restructuring, which is is supplemental to, and should be read in
conjunction with, the prospectus for the purposes of Article 3 of
the UK Prospectus Regulation published by the Company on 3 October
2022 (the "Prospectus") and the first supplementary prospectus to
the Prospectus published by the Company on 4 May 2023 . The Second
Supplementary Prospectus is a regulatory requirement under the
Prospectus Regulation Rules of Financial Conduct Authority,
following the announcement of the TradeFlow Restructuring. An
electronic copy of the Second Supplementary Prospectus will be made
available for inspection on the Company's website at
https://www.supplymecapital.com/investors/ and will be submitted to
the National Storage Mechanism maintained by the FCA and will be
available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
For the purposes of UK MAR, the person responsible for arranging
release of this announcement on behalf of SYME is Alessandro
Zamboni, CEO.
Contact information
Alessandro Zamboni, CEO, Supply@ME Capital plc, investors@supplymecapital.com
MHP Group, SupplyME@mhpgroup.com
Notification of Transaction of a Person Closely Associated
The Company was notified on 30 June 2023 that TAG, a Person
Closely Associated ("PCA") with Alessandro Zamboni, a Person
Discharging Managerial Responsibilities ("PDMR") of SYME acquired a
total of 1,026,525,520 Ordinary Shares at a price of 0.195 pence
each, details of which are below in accordance with UK MAR.
Details of the Person Closely Associated (PCA)
1
a) Name The AvantGarde Group S.p.A.
------------------------------------- ------------------------------------
Reason for the notification
2
---------------------------------------------------------------------------
a) Position/status PCA to Alessandro Zamboni, Chief
Executive Officer of Supply@ME
Capital plc and a PDMR
------------------------------------- ------------------------------------
b) Initial notification/Amendment Initial notification
------------------------------------- ------------------------------------
Details of the issuer, emission allowance market participant,
3 auction platform, auctioneer or auction monitor
---------------------------------------------------------------------------
a) Name Supply@ME Capital plc
------------------------------------- ------------------------------------
b) LEI 213800ZY2C2TI2C5WQ61
------------------------------------- ------------------------------------
Details of the transaction(s): section to be repeated
4 for (i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions
have been conducted
---------------------------------------------------------------------------
a) Description of the financial Ordinary shares of nominal value
instrument, type of instrument GBP0.00002 each in the capital
Identification code of Supply@ME Capital plc
ISIN: GB00BFMDJC60
------------------------------------- ------------------------------------
b) Nature of transaction: Acquisition of shares.
------------------------------------- ------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
------------------------------------- ----------------- -----------------
0.195 pence 1,026,525,520
------------------------------------------------------------ -----------------
Aggregated information
- Aggregated volume 1,026,525,520
- Price 0.195 pence
------------------------------------- -----------------------------------------
e) Date of the transaction 30 June 2023
------------------------------------- ------------------------------------
f) Place of the transaction London Stock Exchange, XLO
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