By Elena Vardon
Non-Standard Finance shares slumped 34% on Thursday after the company said its largest shareholder doesn’t want to participate in the equity raise anymore and that an alternative transaction, which would also result in no recovery for shareholders, is more likely.
At 0750 GMT, shares were down 0.15 pence at 0.30 pence.
The U.K. provider of consumer finance said Alchemy has informed it that it is no longer willing to participate in the raise under the proposed recapitalization in the current environment.
It said Toby Westcott, Alchemy’s nominee nonexecutive director, has stepped down as a director with immediate effect.
Non-Standard said it will carry on with its scheme of arrangement and noted an alternative transaction–which would transfer its business to the secured lenders in exchange for the release of a portion of their secured debt and the provision of a new lending facility–is more likely than the proposed recapitalization.
The recapitalization would materially dilute shareholders interests to negligible value unless they participate in the equity raise, it said.
The most likely outcome is an orderly wind-down after the implementation of the transaction, it added.
Write to Elena Vardon at elena.vardon@wsj.com
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