Yesterday, it was announced that Neil Woodford has sold a major chunk of his stake in the struggling doorstep lender Non-Standard Finance. It has been reported that Woodford sold around 19% of the firm to a fund run by Alchemy Partners. After the ill-fated merger with Provident, what does this deal mean for the Non-Standard Finance and their borrowers?
Executive Chairman of FairMoney, Dr Roger Gewolb, provides the following commentary: “This deal is a positive one that will give borrowers security over the future of their finances and future lending. Alchemy has been a successful revivor of distressed companies and Non-Standard Finance is hugely undervalued as it is still reeling from the ill-judged attempts to take over Provident. I have long been a critic of the NSF/Provident deal and am pleased for consumers and borrowers that Alchemy is providing some stability in this situation.
As I said at the time, the typical doorstep lending transaction is for around £500. The £30 million or so in fees and expenses that were due to be payable by Provvy and NSF to fight the battle which NSF started could have funded some 60,000 borrowers on challenging financial ground who need help.
Provident and NSF each had opportunities (and threats) to act which left the borrowers vulnerable and in unstable financial positions. Evitably, they do not have the same luxury as people like Neil Woodford, but now, they have been released from a heightened and what seemed like an indefinite period of insecurity.”