Ann: AGM Scripts and Presentation Slides, page-2

I must say that reading the below part of the presentations "hurt my head" a little!!

What does everyone make of this statement about the substantial growth opportunities & the terms of the PEP financing facility covenants from Clayton Howes today?

Corporate Debt and Strategic Capital Initiative

During FY23, we have experienced more challenging securitisation term-out and capital market conditions as well as a higher interest rate environment, all of which have made it more difficult to achieve and maintain the level of capital needed to take advantage of the substantial growth opportunities available to the business.

This has come on top of generally challenging equity capital market conditions for most of the year, which led to a decision to increase the size of MONEYME’s senior secured financing facility with Pacific Equity Partners by $25 million in February 2022 to fund the acquisition of SocietyOne.

In light of the macro environment and other market conditions, it has become clear to MONEYME that maintaining its corporate facility at the full $75 million level to term is no longer optimal for the business.

To address this, the Group is negotiating binding legal documentation with PEP to put revised facility covenants in place in the second quarter of FY23 with a recalibration of covenant settings that reflect the more challenging capital market and operating environment, together with a commitment by MONEYME to meet agreed milestones relating to the progression and implementation of the strategic capital initiative, including announcement of a transaction under this initiative by the start of the fourth quarter of FY23.

The Group will also agree with PEP to repay $25m of funding (plus associated costs) under the PEP facility in the second half of FY23 (or the first half of FY24 depending on the nature of the transaction structure adopted) as part of the strategic capital initiative.

This will restore the senior secured financing facility back to its original size of $50m.

The Group’s decision to initiate a competitive process to identify new capital solutions aims to enable MONEYME to take advantage of the substantial growth opportunities in the Australian consumer and auto finance markets, Morgan Stanley has been engaged to assist with the process.

The Group is targeting the announcement of a transaction by the start of the fourth quarter of FY23.

A broad range of capital and strategic solutions are to be considered, with potential transactions including a strategic capital investment, partnership and other strategic transactions.

I note that despite our positive expectations, there is no certainty that any transaction will eventuate.