AZ – Hello all and thank you to everyone who submitted questions. I wanted to have another investor Q&A to hopefully address any concerns you may have and, where I can, provide an update or share more information about [email protected] and the progress of the business.
First published on the 11th March, we thought this is worth re-visiting to help investors further understand the company. All questions are from shareholders, submitted by Share Talk to the company.
First published 17th March 2021
- Are the first securitizations complete?
By the end of last year, effectively all the commercial layers (legal documentation, process definition and operating structure) had been completed. The eligible client companies are ready to implement the inventory monetisation process and their financial advisory teams have approved the structure and derecognition accounting treatment of the inventory monetisation transaction. Our closing process works as follows firstly the Client Company signs a term sheet (which also allows the [email protected] charge the due diligence fee) and once the inventory funder commits the sum, the Client Company, if eligible, signs the monetisation contract. The merits of this approach, to invest more time with Inventory Funders in order to allow them to really assess the Platform (and not just sell the existence of a credit insurance policy), has been borne out recently when we look at the defaults across trade receivables / reverse factoring platforms. We look forward to updating the market by the end of the month.
- Rumours of being bought out, taken over, any truth to this now or in the future?
2020 was a formative year for [email protected] where we achieved key milestones for the business, including the UK listing. The business is now primed to accelerate its momentum and realise its true, global potential. We have no intention of being acquired or selling [email protected]
- Would be good to hear from (interview) another Director of Syme, another voice is good. Also, perhaps an interview with a partner about the exciting projects going forward, is this possible in the near future?
Expanding the spokesperson base is one of the items on our agenda for Q1 and investors can expect to hear from more of [email protected]’s directors and senior team in the near future.
- Any updates regarding business in the USA?
We are working hard with Anthony Brown and his Company in order to arrange a first pilot (our first inventory monetisation transaction in the US market). In parallel, Anthony is supporting SYME to study and develop a version of the platform focussed on inventory in transit (a potential, compelling service for US importers and, more in general, for the whole trade finance global market).
- In what country/region are you experiencing the most interest from regarding Banks and Clients?
The demand for [email protected]’s inventory monetisation continues to surpass our expectations in every geography. The Middle East and our recently launched Shariah product has seen exceptional interest and represents a particularly strong growth area for the future.
- A small client contract is between €10-€15m. Could you give an indication of what the range for medium and large client contracts will be like?
In the past, we have had the opportunity to consider a transaction with a client that had inventory worth Eur150mn. Now, pursuant to the concentration limit of our risk mitigation policy, our cap means we look for client companies with Eur40-50mn worth of inventory to be monetised.
- You describe yourself as an innovator. Would you be looking to reinvest profits as opposed to dividends?
I am an innovator, but also a business owner so I am always trying to find a trade-off between new investments and profit sharing. In any case, any update to the dividend policy of SYME will be approved and disclosed pursuant to regulation.
- Is there interest to acquire other Blockchain businesses that would complement your platform/service?
There are no plans to acquire another Blockchain business at the moment, but the business momentum means that we would not rule out acquisitions in the medium to longer term that would complement our own proprietary platform. In this regard, also in accordance with our business plan, we’re exploring the market of the Internet of Things vendors and Trade Finance Platforms.
- Do you have big investors in the company who have clients they seek to self fund?
We prefer to avoid or manage carefully these kinds of situations, pursuant to external regulation.
- EPIC SIM target 250 clients in 2021. How many other organisations are you looking to work with to bring clients to the platform?
As we stated in previous RNS announcements, we are creating an eco-system of partners in each geography served.
- Once the captive bank is in place, how is it decided whether a customer goes through the open funding route or the captive funding route? Based on geography or other?
The Captive Bank will have an exclusivity/ first look condition in order to allow the latter Bank to originate clients and the Platform to achieve a lower cost of funding.
- When Funder is announced can AZ provide information on the top 50 shareholders (to include Minority Funder) from the Registrar at that time?
Please note that every shareholder can have access to the Registrar.
- Are the eligible Client Companies now in receipt of the identity of the Inventory Funder and the timetable to execute their individual inventory monetisation transactions advised in the 31st Dec RNS?
We confirm that all the Parties are keen to complete the transaction as soon as practicable and, accordingly, a common timetable has been shared. As stated before, SYME is now in the final stage of a typical securitisation transaction and the market will be informed by the end of the month.
- If you want to set up or take over a bank in the EU, you have to get approval from the ECB and its Oversight team. Is the SYME Captive Bank application currently with the ECB and its Oversight team and what time duration is the Acceptance Process anticipated to take? The necessary regulatory checks and approvals have been activated. While we cannot provide an exact timetable for the acceptance process, as this is determined by the European and Central Banks, we are confident of a positive outcome in the coming months. In order to accelerate this funding route, further negotiations are in progress with the target Bank in order to begin working with the [email protected] Platform earlier, in accordance with a pre-agreed interim period, waiting the completion of the authorisation process.
- It would be good to see other Directors promoting this business. For future Q&A, would you consider a joint Q&A with another Director?
Yes. We would be pleased to make the next Q&A a joint one.
- [email protected] Capital provides Inventory Monetisation Services to manufacturing and trading companies. How does a Company hear about your Services and how do they apply to be considered?
The demand for [email protected] services has been such that to date we have not had to market the business at all. Client companies typically come to us via banks and other financial or professional intermediaries who then pass on their interest to us. As we expand the different funding models and into new geographies, we may develop new origination routes and look to market the business. But as demand, currently, significantly outstrips supply, this is not a priority.
- Have noted the CEO of ARGO blockchain doing a standard Q & A from a company based youtube channel where people send questions in and he elaborates on them. Is this an option you would consider?
As many of our investors have noted, I am not shy about appearing on camera so would be very happy to consider this format! I recognise that [email protected]’s business model is complex and, as such, I am open to all means, such as this Q&A, which allow me and the team to better explain our business and keep investors informed.
- Given the acceleration of the US hub establishment due to demand and the new entities created for each region, is there a plan to list on the NASDAQ?
The company continuously evaluates opportunities aimed at supporting the expansion of our business.
- When and how is SYME going to announce who the Shari’a Funding Specialist is and the future relationship?
I am pleased to confirm that our Shariah funding specialist is one of Europe’s largest banking groups. I understand our shareholders are keen to know which Institution this is. As part of our agreement, we were required not to disclose its identity until the authorisation of the Shariah platform was complete. A key milestone of our Shariah-compliant platform was achieved last 20 January – We look forward to updating the market on how we’ll develop our unique Platform gaining traction from the Islamic Finance opportunities.
- Why does SYME PLC not own SYME LTD, this means that shareholders of SYME PLC do not own SYME LTD? AZ is also not a director of this company – why?
SYME Ltd is a recent NewCo and will be owned by [email protected] Capital plc as the Italian subsidiary, [email protected] srl.
- How many direct employees does [email protected] Capital plc (including all associated and subsidiary company’s) currently have?
Our business plan envisages a productivity rate of effectively one team member per 25 client companies. The Group now has 15 employees (excluding the Directors) and several contractors, across the four geographies served (UK, Italy, UAE and US).
- When will we start to see results of the first SH securitisation?
The positive impact of the first securitisation programme will start to become visible in our full year 2020 audited accounts – which will include the due diligence fees already accounted, as stated in the RNS of 28 September 2020. In the 2021 interim financial statements, the Company expects the inventory monetisation fees charged to the client companies as part of the portfolio securitised will be visible.
- As an early investor I am a big believer in the future of this company. I see this as a long term investment but what reassurance can you provide regrading risk of any future dilution?
First of all, I and the team at [email protected] truly appreciate your support and I want to thank you personally for your belief in our business. Private investors are key shareholders in the Company and the need to reward them will be part of every corporate decision taken in the future.
- Have you ever considered a dual listing in the US on the OTC markets and eventually list on the NASDAQ? Do you think it is important to get exposure to American investors as their market is better in valuing future potential of a business compared to the British markets?
The Company always evaluates opportunities aimed at supporting the expansion of our business.
- Although [email protected] Capital was floated in 2020, how long prior to this have you been working on your “baby”?
Over six years. [email protected] business was founded in 2014 – as a business unit of the AvantGarde Group. After several years of investments (legal, accounting, technology), we decided to establish a NewCo (the current Italian [email protected] srl) in order to begin phase two of the project. In this phase we had the opportunity to deliver two important pilots in partnership with a leading Italian banking group. The extremely positive results of these pilots emphasised the scale of the potential demand for this unique service. Accordingly, we decided to scale our business globally and manage a publicly listed company in London ([email protected] Capital plc), which operates as a holding company for several operating subsidiaries across the several jurisdictions.
- We need update client list for UK, UAE and USA and revenue / profit forecast.
We are pleased to note that the last Consolidated Financial Statements published show the positive progress being made in the client company origination process across the several geographies now served.
- Regarding inventory in transit, you have connections with companies such as Maersk. Is your intention to partner with companies of this size and stature, relating to inventory in transit?
We are certainly open to this and believe that many companies will see opportunity in working with [email protected] in this “new-normal” phase of the global trade finance market.
- The Lenovo partnership is the other side of the same coin as Banks self-funding clients. Did Lenovo already have customers lined up to monetise inventory? If so can you give an approximate number? And/or their targets?
We confirm we drafted a detailed go to market strategy with Lenovo Financial Services and iMass, which identified a first group of client companies that are now ready for a first transaction. The reaction of LFS’ customers to our initiative is very positive.
- Hoping before the weekend you can explain the reason for [email protected]’s new listing on Companies House? Investors really need reassurance following the suspension.
The new Limited Company registered with Companies House is indeed a wholly owned subsidiary of [email protected] Capital plc. It has been set up in a specific territory (in this case the UK) ahead of the commencement of operations in this region. As previously announced to the market, establishing a network of subsidiary operating businesses is an integral part of SYME’s Business Model to progress to the next phase in its development, in this case within the UK. This expansion will enable SYME to recruit a local operating team, and advance discussions with client companies and potential inventory funders. [email protected]’s strategy is to open operating subsidiaries in each territory to execute business, rather than centrally through the plc.
We understand this has been a concerning time for investors. However, we feel the launch of a UK subsidiary is a positive step, as it demonstrates real progress in this region. Similarly, [email protected] will also seek to set up US and Middle Eastern subsidiaries in due course and will very likely extend this network further as the Company expands into new territories.
- When I click on the interim report on the home page, a document is opened relating to ‘Abal Group’. Is this an error?
This document is correct. Abal Group plc was an AIM Rule 15 “cash Shell” Company. [email protected] Capital plc completed a reverse takeover of Abal and the enlarged share capital was admitted to the main market of the London Stock Exchange by way of a Standard Listing in March of this year. Audited accounts for the year ended 31 December 2019 have just been published and while these accounts relate entirely to a period prior to [email protected]’s listing, ongoing Listing requirements of the Standard List necessitate their publication for comparative purposes ahead of the upcoming publication of [email protected]’s 2020 full year accounts, which are due to be published in April 2021.
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