November 30, 2021
AS DelfinGroup continues to reduce financing costs and redeems five million euro bonds ahead of schedule
Latvian financial service company AS DelfinGroup continues to implement a cost optimization program for the most expensive previously attracted financing and has redeemed bonds worth five million euros ahead of schedule. The bonds were issued in 2019 and the coupon rate was 14%. At the end of October, AS DelfinGroup already redeemed the five million euro bonds issued in 2016, the coupon rate of which was also 14%.
AS DelfinGroup committed in the initial public offering (IPO) prospectus to repay the financing borrowed in previous years by using the funding obtained during the IPO. On December 25, 2021, the company will complete the repayment and refinancing of 13.5 million euros raised in previous years.
Aldis Umblejs, CFO of AS DelfinGroup: “We continue to implement the company's strategy and fulfil the promises made to shareholders during the IPO, including the reduction of costs of previously attracted financing. In the previous years, interest rates on borrowed financing exceeded 10%, but now we can raise new capital at much lower interest rates. AS DelfinGroup has accumulated experience in working with investors and has strengthened its team for attracting investments. Long-term cooperation has been established with many investors, who have been investing in the company for more than eight years. The investments of the company in the improvement of corporate governance and the listing of its shares on the stock exchange have significantly reduced the potential investment risks for investors. The reduction of investment risk, the stable growth of the company and the successful cooperation with investors so far allows AS DelfinGroup to attract less expensive financing and optimize the company's total operating costs.”
It is planned that by the end of the refinancing program, the total financing costs in 2022 will decrease significantly. To refinance the previous liabilities, AS DelfinGroup uses funds obtained from the IPO and new bond issues, as well as from the peer-to-peer lending platform AS Mintos. On December 27, 2021, 3.5 million bonds with a coupon rate of 12% will be redeemed, while five million bonds issued in July this year with a coupon rate of 9.75% will be retained. A prospectus for a private placement of 10 million euro bond issue with a coupon rate of 8% has also been prepared. Moreover, the average financing rate in the mutual loan platform of AS Mintos currently does not exceed 7%, as AS DelfinGroup has been awarded one of the highest ratings among the issuers of the platform loans.
AS DelfinGroup has been issuing bonds on the Nasdaq Riga stock exchange since 2014. In all these seven years, the company has issued bonds in the amount of 27 million euros. While on October 14, the IPO of AS DelfinGroup was successfully concluded, where almost six thousand investors participated, and the company managed to attract more than eight million euros. The listing of AS DelfinGroup shares on the Baltic Main List was started on 20 October this year.
AS DelfinGroup share capital currently is 45’319’594 shares. Company shareholders are SIA L24 Finance (57.53%), SIA EC Finance (18.81%), SIA AE Consulting (8.83%), along with the company’s management team (3.08%) and 11,75 % other shareholders, which shares are free float on Nasdaq Riga Baltic Main List.
About AS DelfinGroup
AS DelfinGroup is a licenced technology-based financial services company that was established in 2009 and operates under the brand names Banknote and VIZIA. The company continuously develops and offers consumer and pawn loans, loans developed for senior citizens, Buy now pay later loans (BNPL loans), as well as sale of pre-owned goods both online and at more than 90 branches across Latvia. On average, 35,000 thousand loans are issued every month and serviced by the professional team of more than 270 AS DelfinGroup employees. The company has a total of over 400,000 registered customers. Since 2014, AS DelfinGroup has been known on the Nasdaq Riga Stock Exchange as a bond issuer and since 2021 as a share issuer on the Baltic Main List. The company’s IPO in 2021 attracted almost 6000 new shareholders. The company regularly pays dividends to its shareholders. In 2020, the company's net loan portfolio grew to EUR 34.6 million, while its EBITDA reached EUR 9.3 million, with profits before income tax for dividends EUR 4.65 million. The company’s sustainability is based on focused corporate governance, fintech innovation, responsible lending, financial inclusion and facilitating the circular economy. The company has been profitable every year since 2010.