October 25, 2021
AS DelfinGroup will redeem bonds for 10 million euros
On 25 October the Latvian financial services company AS DelfinGroup will redeem 5 million euro bonds (ISIN LV0000802213) issued in 2016. Furthermore, on 25 November, exercising the call option stipulated in the terms of the prospectus, the bonds (ISIN LV0000802379) worth 5 million euros and issued in 2019 will be redeemed before maturity. In total, the bonds worth 10 million euros will be redeemed, thus, reducing the company’s costs of financing and implementing measures to achieve the long-term targets of AS DelfinGroup.
Didzis Ādmīdiņš, Chairman of the Management Board of AS DelfinGroup: “As already provided in our IPO prospectus and strategy for the company's future growth, the funds raised during the IPO will be effectively used to redeem the most expensive bonds. By repaying 10 million euros of bonds and refinancing liabilities, it is expected to achieve a positive effect of up to 1.8 million euros on the company's profit on an annual basis. We are committed to achieve AS DelfinGroup's previously announced growth targets for years 2022 and 2024, which, based on a higher equity ratio, include refinancing and reducing the cost of debt financing. In accordance with the targets of AS DelfinGroup, it is planned to reduce costs of financing below 8% per year in the medium term, which is a pragmatic goal, given the company's current level of development, results and the current growth trends.”
AS DelfinGroup has a more than seven years long track record of successfully issuing bonds on the Nasdaq Riga. During this period the company has placed a total of six bond issues worth a total of EUR 27 million. In total over 160 investors from over 20 countries have invested in AS DelfinGroup bonds. After the redemption of the bonds in the amount of 10 million euros, the active bonds issues will amount to 8.5 million euros, which will consist of two bonds issues of a private placement – bonds issue (ISIN LV0000802429) worth EUR 3.5 million with an annual coupon rate of 12% and a maturity on 25 November 2022 and bonds issue (ISIN LV000085048) worth EUR 5 million with an annual coupon rate of 9.75% and a maturity on 25 August 2023. Investments in bonds by persons related to the company’s shareholders account for less than 1% of outstanding as well redeemed bonds issues.
In addition to bond financing, since 2016 AS DelfinGroup has been cooperating with the peer-to-peer marketplace AS Mintos, which provides an opportunity to raise funds at competitive interest rates and, as the company's loan portfolio grows, flexibly increase the amount of financing. Already today, the nominal interest rates of financing raised via peer-to-peer platform for selected loans may reach as low as 6% per annum. AS Mintos has assigned for the company's loans a risk rating of 8 on a 10-point scale, which is the best rating among the loan originators on the marketplace.
This summer AS DelfinGroup published the company’s long-term financial targets for 2024. By the end of 2024, the company plans to double its consolidated net loan portfolio to over EUR 70 million. Gradually increasing its profitability, in 2024 the company plans to reach EBITDA of EUR 17.6 million, as well as pre-tax profits of EUR 12.9 million. AS DelfinGroup has established and adheres to a policy to make quarterly dividend payments, distributing up to 50% of quarterly profits to shareholders. In addition, once a year after the approval of the annual report, the company may opt to pay additional dividends (annual dividends). During the financial year, the company plans to distribute dividends to shareholders amounting to at least 50% of its consolidated profits.
The initial public offering (IPO) of AS DelfinGroup successfully closed on 14 October and was the largest IPO in the history of Latvia in terms of investor activity. 5,927 investors participated in the IPO and the company raised 8,09 million euros. On 19 October 2021 Nasdaq Riga decided to list AS DelfinGroup shares on the Baltic Main List as of 20 October 2021.
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 was the largest in the history of Latvia in terms of investor activity having 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.