Wellesley to become unregulated entity, as CVA voting begins
Wellesley & Co will operate as an unregulated entity pending the results of a creditor vote on entering into a company voluntary arrangement (CVA).
The property-backed platform has also made it clear that it will no longer accept retail investors and instead will rely solely on institutional funding.
Read more: Wellesley suspends investor payments as it plans restructure
“If the [CVA] vote is passed, Wellesley will continue to service the loans, but we will be a much smaller business,” said Andrew Turnbull (pictured), director and co-founder of Wellesley Finance.
“We have already declared to the market that we will withdraw our Financial Conduct Authority authorisation. And that’s a decision we have made, because we will not need it. So we will not be issuing bonds, and we have no intention of moving back into issuing any sort of retail investment products under any other guise.
“We will start to do more syndicated lending, where we work with other institutions who wish to co-lend with us on developments, and we will also do other direct lending opportunities where we put the loans on our balance sheet.”
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Turnbull added that the company will be “much smaller”, creating a “much more simple, straightforward, less expensive business to run.”
“That will hopefully lead to a more successful, more profitable business, allowing us to return proceeds back to those unsecured creditors,” he said. “But I see us shrinking in size and focusing on property development lending without any sort of retail consumer fund raising.”
Earlier this month, Wellesley announced that it had suspended all payments to investors while it asked its creditors to back a CVA to support a restructure.
Peer2Peer Finance News understands that creditors have been asked to place their votes online, due to Covid-19 restrictions. CVA votes would usually take place in person at an extraordinary general meeting. At least 75 per cent of voters must vote in favour of the CVA in order for the motion to pass.
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