Funding Circle has made a gain of approximately £4m through the disposal of business loans in its two US warehouses.
The London-listed peer-to-peer lending platform said on Thursday that the small- and medium-sized enterprise (SME) loans were sold to an unnamed asset management firm for a consideration of approximately £63m.
Funding Circle will receive net cash proceeds of approximately £38m following the paydown of the bank debt associated with these loans.
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“This disposal is consistent with our previously stated strategy of monetising pre-pandemic investments we hold for sale as opportunities for realisations allow,” said Funding Circle in a stock exchange announcement.
The company said that the sale price implies a fair value gain of approximately £4m, which will increase its projected adjusted earnings for the six months ending 30 June 2021. Funding Circle is due to report its half-year results on 9 September 2021.
John Cronin, an analyst at brokerage Goodbody, said that the sale represented “a further sign of favourable momentum from an FCH investment case standpoint.”
Funding Circle’s share price rose by more than five per cent in early trading.
Earlier this month, Funding Circle sold a bundle of bad loans to US fund manager Azzurro Associates, netting £16m for the platform’s investors. All of these loans were believed to have gone into default before the Covid-19 pandemic.