FrontOffice signs investment credit facility for fintech investment of SEK 20 million
The investment credit is provided by FTCS Intressenter AB and provides FrontOffice with an unsecured credit of up to 20 MSEK over a three-year period to an annual interest rate of 8 % on long-term credit.
The investment credit also provides FrontOffice with a one-sided right to convert, on one or more occasions, the outstanding amount of loan at any time during the three-year period, together with interest on the issue of class B shares in FrontOffice, applying a subscription price, without premium, based on average volume weighted retail price for 15 trading days call for conversion. No setup fees or other fixed fees are included with the credit.
"For decades, traditional banks and other companies in the financial sector have worked with highly profitable, stable business models. They earn money on deposits and money management, and on high fees for transactions of the customers' money. But today they are confronted by innovators who develop technology for the financial sector in brand new ways. New regulations, internet and mobile technology and an increasingly boundless world create huge business opportunities. Fintech transforms the global financial industry rapidly, the new solutions are better and cheaper for individuals and business customers than old solutions, and there is strong interest from investors in the sector, "says Johan Lund, CEO FrontOffice.
"This agreement provides flexibility and enormous strength for our company and enables us to continue investing in exciting cases and developing our existing fintech holdings, thereby consolidating our position as fintech investors. FTCS Intressenter AB is a company we have been working closely with within the framework of our holdings in FTCS Sweden AB (publ) and Quickbit eu AB (publ). We are convinced that with this investment credit and common network we can continue to find good business with the right profile in the fintech sector, "says Johan Lund.
"FrontOffice has so far worked exclusively with equity as a base. With the flexible solution that this agreement entails, we have the opportunity to increase the loan-to-value ratio of our solid balance sheet to increase return on equity and thus earnings per share" says Johan Lund.
Last spring, FrontOffice' operations were divided into two business areas, where one area, like before, invests in turnaround cases, and the other part focuses on growth investments, primarily in fintech. The reason for the strategic business division is primarily to be able to maintain a clearer operational focus and to have the opportunity to recruit relevant resources. The division also aims to clarify against the market what types of investments FrontOffice will focus on in the future.
"The goal is to take an equally clear position within fintech investments as we have done within turnarounds," says Johan Lund