Settlement Agreement

RNS Number : 6170I

Alpha FX Group PLC

02 April 2020

 

2 April 2020

Alpha FX Group plc

("Alpha" or "the Group")

Settlement Agreement

Alpha FX Group plc (AIM: AFX), an FX risk management and payments specialist servicing corporates and institutions internationally, today wishes to provide a further update to shareholders from its COVID-19 Trading Update released on 30 March 2020.

The Group is pleased to confirm that it has now entered into a legally binding settlement agreement (the "Settlement Agreement") with the client that owed it £30.2m in unpaid margin. Under the terms of the Settlement Agreement, the client will be required to repay £1.05 million by Friday 3 April 2020, with the remaining amount owed repayable in equal weekly instalments of £266,543 between 13 April 2020 and 10 June 2022.  Accordingly, £10.4m (34%) of the amount owed is expected to be repaid by the end of FY 31 December 2020. 

The Settlement Agreement will continue to support the working capital needs of the client who, given unprecedented movements in exchange rates, was unable to pay its margin without reneging on contracts it held with global supermarket chains.  This in turn would ultimately reduce revenues it could use to repay Alpha.  Conversely, supporting the client during a period of increased consumer demand for its food produce, could generate increased levels of profitability which may in turn lead to accelerated repayment of the amount owed under the terms of the Settlement Agreement.

The Board believes that its entry into the Settlement Agreement will lead to the quickest recovery of the full amount owed, will provide needed support to a valued existing client, and is in the best interests of the Group and its shareholders.

The Group notes that the maximum impact on its cash flow available for collateral at any one time, as a result of this amount owed to it, is £19m.  This reflects the £10.4m that was previously tied up against this client's position as part of the Group's regular stress testing, now being unlocked.  The Group's top 20 clients by currency pair concentration (represented as a percentage of the forward book) are as follows:

1	GBP/USD	3.24%	11	EUR/USD	1.28%
2	EUR/USD	2.71%	12	GBP/USD	1.20%
3	GBP/EUR	2.23%	13	EUR/USD	1.19%
4	GBP/EUR	2.21%	14	EUR/USD	1.16%
5	GBP/EUR	2.20%	15	EUR/USD	1.05%
6	GBP/USD	2.18%	16	GBP/USD	1.03%
7	EUR/USD	1.88%	17	USD/JPY	0.99%
8	EUR/USD	1.56%	18	GBP/EUR	0.98%
9	EUR/USD	1.55%	19	USD/CAD	0.95%
10	GBP/USD	1.33%	20	USD/CAD	0.94%

Morgan Tillbrook, CEO of Alpha FX commented:

"These are unprecedented times; however, we are pleased to be in position to support a valued client whose produce is critically needed in this climate, whilst also protecting our own commercial interests.   I am pleased how we have been able to work together to find a solution which is satisfactory for both parties."

Enquiries:

Alpha FX Group plc  via Alma PR

Morgan Tillbrook, Founder and CEO

Tim Kidd, CFO

Henry Lisney, COO

Liberum Capital Limited (Nominated Adviser and Sole Broker)                           020 3100 2000

Neil Patel

Richard Bootle

Kane Collings

Alma PR (Financial Public Relations)  Tel: [phone]

Josh Royston

Helena Bogle

Rebecca Sanders - Hewett

Market Abuse Regulation

This announcement is released by Alpha FX Group plc and contains inside information for the purposes of the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR. The person who arranged for the release of this announcement on behalf of Alpha FX Group plc was Tim Kidd, Chief Financial Officer.

Notes to Editors

Alpha is a foreign exchange and payments specialist focused on helping organisations manage their currency exposures more effectively. The Group's primary client base consists of corporates and institutions that have a requirement to convert currency for a commercial purpose, such as buying or selling goods and services overseas, repatriating profits, or expatriating payroll. Since it was incorporated in 2010, Alpha FX has been able to build and retain a high-quality client base that includes a number of highly respected household brands.

 

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