St James House PLC Restructuring of Payment Division (2497T)
23 Mars 2021 - 7:18PM
UK Regulatory
TIDMSJH
RNS Number : 2497T
St James House PLC
23 March 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
23 March 2021
ST. JAMES HOUSE PLC
("SJH", the "Group" or the "Company")
Restructuring of Payment Division
During 2019, the Group established a new subsidiary, St. Daniel
House Limited, which is approved as an EMD Agent [1] by the
Financial Conduct Authority ("SDH"). During 2020, the Group rolled
out its new FX, payment, account and merchant services on the
superior SDH platform, migrating most customers from its legacy
platforms. During that period, the Group's card issuing, and
e-wallet activities remained within its Market Access Ltd
subsidiary ("MA"). However, the institution used by MA to issue
cards and the associated e-wallet services has withdrawn from the
European market. The Board concluded that it will be beneficial to
integrate the pre-paid card issuing and e-wallet offered by its new
service provider with SDH's merchant and multicurrency account
services in order to service our European and international client
base. MA has no ongoing trading activities.
The Board has therefore agreed to sell MA to MDC Nominees
Limited ("MDC") for GBP1.00 (the "Disposal"). MDC has previously
acquired other subsidiaries involved in payments from SJH and has
an existing commercial and creditor arrangement with SJH, as
announced 12 July 2018 and updated on 6 February 2020 (the
"Announcements"). MA will form part of that existing contractual
arrangement and MDC, which is expected to utilise the legacy
platform for its "non-conforming" customers, as set out in the
Announcements.
Due to the nature of the "non-conforming" business undertaken by
MDC and its subsidiaries, there are often legal disputes, which was
one of the key reasons for SJH exiting this type of business.
However, if MDC is successful in certain current legal claims, then
under the terms of the original disposal of its interest, SJH is
expected to benefit from accelerated repayment of the loan note due
from MDC (as set out in the Announcements). SJH is not directly or
through any of its subsidiaries engaged in any litigation.
MA made a loss of GBP321.5k in the 12 months to 31 January 2019
(the date of the last published Group accounts) and had a negative
net asset position of GBP98.2k as of 31 January 2019. As MA
continued to make losses during the financial year to 31 January
2021, the Disposal will have a modest positive impact on both the
trading performance and balance sheet of the Group.
MDC is owned by John Botros, a director of certain Group
subsidiaries and, with persons closely associated (as defined under
the Market Abuse Regulation), a substantial shareholder (as defined
by the AIM Rules for Companies) of the Company. The Transaction
therefore constitutes a related party transaction under the AIM
Rules for Companies. The Board consider, having consulted with
Allenby Capital Limited, the Company's nominated adviser, that the
terms of the transaction are fair and reasonable insofar as its
shareholders are concerned.
For further information, contact:
St. James House PLC
Roger Matthews
Website www.sjhplc.com 020 3655 5000
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss 020 3328 5656
[1] a firm that can act on behalf of another firm that is
authorised or registered by the FCA as a payment or e-money
institution. Services that are rendered by E-money agents can
include merchant solutions, e-wallets, e-vouchers, and payment
processing
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END
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