TechFinancials reaches agreement to sell MarketFinancials
By Josh White
Date: Wednesday 16 Jan 2019
(Sharecast News) - Fintech software provider TechFinancials said on Wednesday that, further to its announcement on 1 March, it has entered into legally binding, conditional share purchase agreement with Cyprus-incorporated Proverial to sell its holdings in MarketFinancials.
The AIM-traded firm said the total consideration for the subsidiary, which the firm no longer considered to be core to its future strategy, would be €0.1m, subject to any closing balance sheet adjustments.
Until 28 February last year MarketFinancials - a company regulated by the Seychelles Financial Services Authority (SFSA) - was the provider of market maker services and risk management to B.O. Tradefinancials (BOT) - a subsidiary of the company that ceased its operation and returned its license to CySEC in May.
MarketFinancials' only source of income in 2018 was derived from the provision of market maker and risk management services to BOT and, as a result of the cessation of BOT's activities, the subsidiary had not traded since the end of last February.
As at 30 June, MarketFinancials had net assets of around $0.09m, and was held on the balance sheet of the group at nil carrying cost.
For the year to 31 December 2017, MarketFinancials made a net profit of about 0.05m.
Under the conditional share purchase agreement, TechFinancials will sell its entire shareholding in MarketFinancials to the buyer for a purchase price of €0.1m, based on nil net assets in MarketFinancials, and which would be adjusted accordingly on closing.
The company said the share purchase agreement was conditional on the consent of the SFSA, which was expected to be received no later than 30 June.
"We sought to dispose of the company's holding in MarketFinancials as we view these operations as being non-core to operations following the decision to step away from B2C operations in Europe," said TechFinancials chief executive officer Asaf Lahav.
"The company continues operating and serving businesses in the Asian market where the majority of revenue is generated.
"We are pleased to have now reached a solution and intend to reinvest the sale proceeds into building TechFinancials' new offering within the blockchain trading sector."
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