Dubai: Banks risk losing millions of dollars due to their exposure to Finablr Plc, the foreign exchange operator that’s preparing for potential insolvency.
These banks are still owed about $300 million by Finablr’s parent BRS Ventures, which is owned by the Abu Dhabi based billionaire Dr. B.R. Shetty. The loan was used to refinance a bridge loan for the acquisition of Travelex Holdings Ltd.
Shetty pledged about 56 per cent of his shares in the London-listed firm as collateral for the loan when he was unable to repay it after Finablr’s initial public offering last May. Since listing, the shares have plummeted about 93 per cent, giving Finablr a market value of 77 million pounds ($89 million) when it was halted from trading this week.
That’s down from a peak of 1.5 billion pounds in December, making it one of the most value-destructive IPOs in London in recent years.
Finablr, which owns foreign exchange businesses including Travelex, this week said it hired an adviser to prepare for potential insolvency proceedings. The firm also warned the board couldn’t accurately assess its financial situation and said its chief executive officer was stepping down.
Shetty hired Houlihan Lokey to explore strategic options for BRS Ventures. The investment banking firm will revamp debt and seek potential investment partners or sell assets from the portfolio, which holds 30 companies.