Receivables purchasing arrangement
Synthomer plc has entered into a temporary trade receivables purchasing arrangement with Rainbow State Limited, a subsidiary of its largest shareholder KLK, to enhance short-term financial flexibility and maintain covenant headroom. Under this agreement, KLK will purchase approximately £50 million of Synthomer's trade receivables due by February 28, 2026, which are not eligible for the company's existing €200 million facility. The total receivables under both arrangements are expected to not exceed €200 million, or approximately £175 million. The board, excluding interested parties, considers this arrangement fair and reasonable for shareholders, as advised by their sponsor.
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Synthomer plc ('Synthomer' or the 'Company') today announces that it has entered into a trade receivables purchasing arrangement with Rainbow State Limited, a subsidiary of its largest shareholder Kuala Lumpur Kepong Berhad Group ('KLK'). The Company has put this temporary arrangement in place with the support of KLK to provide additional short-term financial flexibility and ensure a prudent level of banking covenant headroom at year end.
Under the arrangement, the Company and KLK have agreed that KLK will purchase c.£50m of Company trade receivables due on or before 28 February 2026, which are not eligible for inclusion in the Company's existing committed €200m non-recourse receivables financing facility. It is anticipated that receivables purchased under the arrangement and in the existing committed receivables financing facility together will not exceed €200m (c.£175m). The purchasing arrangement terms have been agreed on an arms-length basis and are consistent with terms available from third party market participants for an arrangement of this nature.
Related party transaction
By virtue of KLK and its connected parties' c.27 per cent shareholding in Synthomer, KLK is considered a related party of Synthomer under the UK Listing Rules. The board of Synthomer (excluding Dato' Lee Hau Hian and Uwe Halder by reason of their relationship with KLK) considers that the purchasing arrangement is fair and reasonable as far as Synthomer shareholders are concerned, and have been so advised by Rothschild & Co acting in its capacity as sponsor in relation to this related party transaction.
Post-close trading update
Synthomer plans to publish its post-close trading update for the year ending 31 December 2025 in late January.
Synthomer plc is a leading supplier of high-performance, highly specialised polymers and ingredients that play vital roles in key sectors such as coatings, construction, adhesives, and health and protection - growing markets for customers who serve billions of end users worldwide. Headquartered in London, UK and listed there since 1971, we employ c.3,800 employees across our five innovation centres of excellence and 29 manufacturing sites across Europe, North America, Middle East and Asia. With more than 6,000 blue-chip customers and £2.0bn in continuing revenue in 2024, our business is built around three divisions, serving customers in attractive end markets where demand is driven by global megatrends including urbanisation, demographic change, climate change and sustainability, and shifting economic power.
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