Finablr updates on shareholding matters, commissions review following Travelex cyber-attack

Finablr PLC (LON:FIN), a provider of cross-border payments, FX and payment technology, today provided an update to the market regarding the current position on the Shetty family’s shareholding.

As FinanceFeeds has reported, Finablr has sought information about purported arrangements relating to interests in the company and any other members of its group, including by issuing notices under s793 of the Companies Act 2006. In response, the Board has received confirmation from Dr B.R. Shetty (Co-Chairman), Mr. Binay R. Shetty (Director) that the information set out in the IPO Prospectus about the shareholding levels of BRS Investment Holdings 1 Limited, BRS Investment Holdings 2 Limited and BRS Investment Holdings 3 Limited was accurate and complete and that Dr. Shetty and Mr. Binay Shetty are presently the beneficial owners of 459,579,041 shares, representing 65.65% of the company.

Let’s recall that, on January 24, 2020, Finablr announced that shares held by BRS Investment Holdings 1 Limited, representing 56.03% of the shares, had been pledged as security for borrowings. Dr. Shetty and Mr. Binay Shetty have also confirmed to the Board that, prior to the January 24, 2020 disclosure, none of these shares, nor any other shares in the company held beneficially by the Shetty-family owned entities, had been pledged as security.

In addition, Finablr announces that, following the cyber incident affecting the Travelex business, a post-incident review would be launched. Travelex has already conducted a thorough technical review to ensure the resilience of its business and the Finablr Board is now commissioning a post-incident review by an independent third-party to ensure that the findings and recommendations from the incident are also reflected in the systems and procedures of all Finablr group companies.

Last week, Travelex responded to a rating cut announced by Standard & Poor’s on March 4, 2020, shortly after Travelex said the recent cyber-attack and the outbreak of Covid-19 would have a negative impact on its financial results.

Travelex warned that the effects of the ransomware attack, combined with lower transaction volumes from COVID-19, will reduce its underlying EBITDA for the first quarter of 2020 by £25 million. S&P said that the effect would be to make the capital structure deeply unsustainable.

Additionally, S&P believe that an event of default in the debt at BRS Ventures & Holdings Ltd. (BRSV; the financing vehicle of Dr. B. R. Shetty) over the next few months could trigger the change-of-control clause under the documentation of Travelex’s bonds (through the enforcement of the pledge over Finablr shares). Dr. B R. Shetty and his son hold about 66% of Finablr, which in turn holds 100% of Travelex, S&P explains.

That is why, S&P lowered to ‘CCC’ from ‘B-‘ their ratings on Travelex Holdings Ltd. and their issue rating on the €360 million notes due 2022 to ‘CCC-‘ from ‘B-‘. S&P lowered their issue rating on the £90 million super senior revolving credit facility (RCF) to ‘B-‘ from ‘B+’. The ratings remain on CreditWatch negative.

Travelex said it was disappointed with the decision about the rating downgrade but remains committed to developing its business in 2020.