GLI FINANCE has announced a platform held within its Fintech Ventures portfolio is at risk of becoming insolvent and has written off the value of this investment to zero.
The Aim-listed alternative finance group did not name the platform in question, but said that it “is facing significant financial difficulties and requires immediate investment to continue trading”.
“Whilst the platform is in talks with various parties to source immediate further investment, there is no guarantee that such talks will be successful,” GLI Finance added in the stock market announcement.
“Accordingly, the board believes that it is appropriate to write down the value of this investment to zero, resulting in a £1.9m fair value adjustment.”
GLI’s shares were trading more than seven per cent lower as of Tuesday afternoon.
There has been a rising disparity between the two arms of GLI’s business – Fintech Ventures, which invests in fintech platforms, and its lending division Sancus BMS.
In its latest annual results, the firm reported operating losses of £2.3m for the year ended 31 December 2018, dragged down by a £19.6m writedown on its Fintech Ventures portfolio.
In contrast, the Sancus BMS division has been performing well, posting strong growth in revenues and operating profit.
In Tuesday’s update, GLI said that Sancus BMS “continues to grow and has performed in line with expectations so far year to date”.
The Fintech Ventures investments listed by GLI in its latest annual results presentation are: Finexkap, Funding Options, LiftForward, The Credit Junction, Trade River UK, Torca (formerly UK Bond Network), Open Energy Group, Trade River USA, MyTripleA, Finpoint and Ovamba.