Operational & Strategic Update & Board Changes

Fiinu PLC

29 September 2023

 

29 September 2023

Fiinu Plc

("Fiinu", the "Company" or the "Group")

Operational & Strategic Update & Proposed Board Changes

Fiinu, a fintech group, creator of the Plugin Overdraft®, provides an operational and strategic update.

Overview

On 12 July 2023, the Company reported that it was still facing challenges in order to raise the full amount of funding required to provide the exit capital for its subsidiary Fiinu 2 Limited (formerly Fiinu Bank Limited) to be able to exit its mobilisation period and commence operations without restrictions. It also stated that it had submitted (and had accepted by the regulators) an application to withdraw its banking licence with the aim of re-applying after a short period once exit funding had been secured. These funding challenges have continued over the summer and, whilst the Company remains engaged in a number of live discussions with potential investors, none of them has advanced sufficiently at this point to enable Fiinu 2 Limited to make a re-application for its banking licence.

Cash resources

As announced on 12 July 2023, the Company initiated controlled cost reductions at its subsidiaries, Fiinu 2 Limited and Fiinu Holdings Limited.  By reducing costs in Fiinu 2 Limited and Fiinu Holdings Limited, the balance of resources available to the Company and across the Group are providing additional time to determine the best way forward for shareholders for the current or potential alternative strategy. 

These cost reductions have proceeded according to the Company's detailed plan and remain on track.  As at 28 September 2023, the Group had available unaudited cash resources of approximately £1.9 million, having repaid the £750,000 principal (and unpaid interest of £7k) outstanding on the Dewscope Loan, originally entered into on 15 June 2022, as amended on 14 March 2023. The amount remaining represents enough funds to enable the Group to scale back its current operations in Fiinu 2 Limited and Fiinu Holdings Limited and continue to meet its financial obligations as they fall due.

Maintain strategy

The Board plans to continue with its cost reduction process, which will accelerate from now until the end of the financial year, to preserve the integrity of its technology intellectual property, infrastructure and regulatory documentation, but will reduce headcount significantly to preserve cash. 

This will ensure that Fiinu 2 Limited is in a position to commence the re-application for its banking licence when the Company has secured the required funding. However, ahead of making the re-application and to ensure the required level of technological and regulatory readiness for the business to re-initiate the process, a hiring process will need to be undertaken by the Board. It is not possible at this time to quantify the time period.

Certain members of the Board of Fiinu 2 Limited and the Company have now been served notice to reduce future operating costs, in line with the Company's cost reduction plan, and will step down as directors on 31 December 2023.  Further details are set out below.

To provide further continuity of knowledge, all the non-executive directors of Fiinu 2 Limited will be retained on a consultancy basis, at no cost, and be available to support the future fundraising efforts, as well as support any engagements with the regulators when required. 

Board announcements

David Hopton, Jerry Loy, and Huw Evans will leave the Company's Board on 31 December 2023, in the absence of any new potential funding developments.  All have agreed to remain after this time in an advisory capacity to support future fundraising activities and assist with any future engagement with the regulators should that be required.  Chris Sweeney, Group CEO, and CEO of Fiinu 2 Limited, has also been served notice as planned and will step down as a Director of all the Group companies on 31 December 2023.

From 31 December 2023, in the absence of any funding developments and/or additional board appointments, the Company's Board of Directors will consist of Simon Leathers (Senior Independent Non-executive Director) and Marko Sjoblom (Founder and Executive Director), who will be appointed as Group CEO from that date during the fund-raising period with deferred remuneration subject to being successful with the re-application process.  The Company will also look to recruit further independent non-executive directors, as appropriate, to satisfy its corporate governance requirements.  Further announcements will be made as appropriate.

Further funding requirements

The Company will continue to review all its options in respect of the business, including further discussions to source the additional funding required for it to re-apply to the regulators to re-commence the banking licence application for Fiinu 2 Limited.  As part of the continued review of its cashflow requirements, the Company will look to raise further funding to support at least the 12-month period from the issuance of the 2023 Year End accounts, whilst it seeks to raise the capital for the re-application process.  As previously announced the required capital for the re-application process is between £35m - £42m.  Further announcements in respect of the interim funding requirements will be made in due course.

No change to current strategy

As referred to above in this announcement, the Company does not anticipate, at this time, changing its current strategy.  Any fundamental change of strategy that involves the cessation of operations, or the sale of all or substantially all of the Group's business and assets (for example, the Group's technology stack and other intellectual property) would require the approval of shareholders in general meeting in compliance with AIM Rule 15, but no decision on this course of action has been made.

The Company will make further announcements on progress and other developments as and when appropriate.

Commenting, Chris Sweeney, CEO of Fiinu, said:

"Funding conditions have remained challenging for a business at Fiinu's stage of development.  It is disappointing that we have been unable to secure the required funding to enable the Company to launch into the marketplace.  In the current economic climate, there is a definite need for the Plugin® overdraft to support customers with their credit needs.

I must again thank colleagues for their work in developing our technology solution and infrastructure which will give the Company the best chance to re-launch in the future should it secure the required funding when capital markets improve.  I would also like to thank them for their understanding of some of the recent decisions we have had to take to preserve cash and wish them every success in the future.  The proposed Board changes are also being made to reduce ongoing costs to preserve cash, but I am delighted that all the non-executive directors have agreed to remain as unpaid Board advisers to assist the Group with future fundraising efforts, as well as support any engagements with the regulators as required.

The Company will continue to engage with potential investors as it has been doing for many months."  

Market Abuse Regulation ('MAR') Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ('MAR'), which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, until the release of this announcement.

ENDS

Enquiries:
Fiinu plc Chris Sweeney, Chief Executive Officer www.fiinu.com	via Brazil London (press office for Fiinu)
SPARK Advisory Partners Limited (Nomad) Mark Brady / Adam Dawes	Tel: [phone]
SP Angel Corporate Finance LLP (Joint Broker) Bruce Fraser / Ezgi Senturk	Tel: [phone]
Panmure Gordon (UK) Limited (Joint Broker) Stephen Jones / Atholl Tweedie (Corporate Finance) Hugh Rich (Corporate Broking)	Tel: [phone]
Brazil London (press office for Fiinu) Joshua Van Raalte / Christine Webb / Jamie Lester	Tel: [phone]

About Fiinu

Fiinu, founded in 2017, is a fintech group, that developed the Plugin Overdraft® which is an unbundled overdraft solution that allows customers to have an overdraft without changing their existing bank. The underlying bank Independent Overdraft® technology platform is bank agnostic, that therefore enables it to serve all other banks' customers. Open Banking allows Fiinu's Plugin Overdraft® to attach ("plugin") to the customer's existing primary bank account, no matter which bank they may use. Fiinu's vision is built around Open Banking, and it believes that it increases competition and innovation in UK banking.

For more information, please visit www.fiinu.com

 

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