SHP Capital Holdings Limited (SHP), the direct owner of Fenchurch Legal, was forced into administration by a creditor due to an event of default occurring on one of its liabilities. Control of SHP has been passed to an appointed administrator whose primary goal is to use the assets of SHP to repay creditors. It is likely that a corporate restructure of SHP will take place.
What are the impacts on Fenchurch?
Fenchurch Legal is a separate entity and continues to trade as normal. We don’t expect the company to be affected financially by the issues that have occurred with SHP, and here’s why:
- The company finished 2021 with a strong equity to assets ratio of 31%.
- Its loan portfolio reached almost €20 million of high-quality loans.
- There were no non-performing loans as of the end of 2021.
In addition, Fenchurch’s obligations towards its parent company are subordinated to its obligations towards investors on Mintos. This means the lending company has to cover repayments to investors on Mintos before covering its liabilities to SHP. Consequently, Mintos is not taking any restrictive measures regarding Fenchurch loans on Mintos.
When Fenchurch joined Mintos, SHP provided a group guarantee. While the guarantee is still in force, its value as an additional security has fallen. It’s important to mention that the company has had a better standing than the group for some time already, and this information is already reflected in the Mintos Risk Score with a low-weight impact group guarantee. From today, the group guarantee will no longer be listed on the lending companies overview on Mintos, and due to its low-weight impact, the rounded Mintos Risk Score does not change for loans from this company. The score will be recalculated once we have more information from Fenchurch about which other security will replace the group guarantee.
We welcome you to share your comments and questions in the Mintos Community space dedicated to this topic.
About Fenchurch
Fenchurch Legal is a UK-based specialist in litigation financing, offering a flexible funding solution to UK law firms to fund small ticket ATE (“After the Event”) claims. Each of the company’s disbursements is insured by an ATE insurance policy.
Fenchurch Legal is part of the SHP Capital Group, a corporate lending business primarily focused on providing finance to UK companies. The company’s clients are small UK-regulated law firms that specialize in taking on ATE claims on behalf of claimants. A high volume of small-ticket legal cases is funded on a weekly basis. An average loan provided is approximately GBP 3 000, with an average term of 6 to 12 months.
