Business
Concerns re NSF financial position & CMA condition
Concerns re NSF financial position & CMA condition.
About this update from Vanquis Banking Group Plc
[{"type":"text","content":"\n \nRNS Number : 3377Y Provident Financial PLC 08 May 2019 \n\nNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION\n \nFOR IMMEDIATE RELEASE\n \n8 May 2019\nProvident Financial plc (\"Provident\")\nProvident highlights concerns for its shareholders regarding the financial position and valuation of Non-Standard Finance plc (\"NSF\") and the Competition and Markets Authority (\"CMA\") condition\n \nIn light of NSF's all-share Offer, Provident has in recent weeks undertaken a further detailed review of NSF's historical financial disclosures, with a view to enabling Provident Shareholders to better understand the financial position of NSF and the valuation of its shares, which are being offered as consideration.\nProvident's review has uncovered several areas of concern in relation to NSF, which reveal:\n1. that there may be an undercapitalisation of the enlarged group on a pro-forma basis as a result of the combination with NSF, potentially requiring a capital raise;\n2. significant headwinds facing NSF's businesses, indicated by NSF's own financial data on gearing and provisioning;\n3. an overly positive perspective on NSF's own headline financial performance, despite reporting statutory losses since incorporation; \n4. a reduction of NSF shareholders' equity since incorporation through shareholder distributions, many of which NSF has admitted were unlawful, and repeated statutory losses; and\n5. that NSF appears to be overvalued relative to other UK lenders, especially taking into account its financial performance.\nFurther, the Provident Board strongly believes the risks associated with a Phase 2 review by the CMA are not risks the Provident Shareholders should bear, and therefore urges Provident Shareholders to take no action in relation to the Offer.\nConcerns regarding NSF's financial position\nProvident's findings in relation to the financial position of NSF, following a detailed review, are summarised below and in a presentation, titled \"NSF: a different perspective\", setting out the analysis in more detail, which can be found at https:www.providentfinancial.com/investors/unsolicited-offer/.\n1...