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Towry agrees £47.3m refinancing deal

Andrew Fisher 480

Towry has agreed a £47.3m refinancing deal with Macquarie Bank and Royal Bank of Scotland to boost capital and drive the growth of the business.

The proceeds of the debt issuance, made up of £42.5m in senior and junior loans from Macquarie and £4.8m of senior debt from existing lender RBS, were used to repay an earlier mezzanine debt facility.

Towry chief executive Andrew Fisher (pictured) says: “The new lending facilities we announce today significantly reduce our financing costs and provide a sound capital structure for further expansion of the company.

“Our finance team has put in an exceptional amount of work in order to secure these loans, which we believe will help us to achieve our ambition of becoming the leading firm of wealth advisers in the UK.”

Towry posted an operating profit of £10.2m in 2011 compared with a £5.5m loss in 2010 following £17.7m in costs related to the integration of Edward Jones, which it acquired for £1 in October 2009. It was hit with litigation costs of £2.3m following its failed court case brought against Raymond James and seven former Edward Jones’ advisers alleging client solicitation.

In February, a High Court judge dismissed all charges brought by Towry and ordered it to pay Raymond James’ full legal costs of £1.2m, on top of its own legal costs of £1.1m.

Facts and Figures Financial Planners managing director Simon Webster says: “It seems as though Towry has refinanced a part of its existing debt book at a softer rate, which will push up its operating profit and make it a more attractive flotation prospect. It is encouraging there are lenders who are prepared to support financial services businesses.”


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. RegulatorSaurusRex 20th September 2012 at 5:28 pm

    I thought this outfit was heading for a float that would make them all millionaires.

  2. This article doesn’t really tell us much, without more detail.

    On the face of it, Towry have replaced junior debt (same thing as mezzanine debt) with a combination of junior and senior debt.

    However, we don’t know the terms, or amounts, of the deal. We can only presume that senior debt has been sought in order to reduce the funding costs, however, such funding can be prejudicial to the interests of other parties.

    In addition, does the restructured junior debt come with strings attached, such as warrants or equity?

    If Mr Fisher has achieved a deal on the same terms, but at a lower financing cost; then this could be good news.

    However, if he has hocked the family silver as part of the deal, shareholders may not be so happy.

  3. Why is it that financial services companies are all run by short balding men ?

  4. How does £47.3m of debt constitute “a sound capital structure”? My idea of a sound capital structure is what Tenet has, namely a war chest of £25m+ actually in the bank with no debt.

    Echoes, methinks, of the Millfield Partnership not long before it came apart at the seams and went down in flames. If TL goes the same way, few tears will be shed other than by its shareholders and by its directors who’ve all been hoping to get rich by taking the company public. Haven’t heard much about that lately, have we?

    And yes, I seem to recall that Millfield’s CEO was bald and a generally unappetising specimen to behold.

  5. Was he misquoted? Did he actually say “The leading wealthy team of advisers”?

  6. Further to my earlier submission, I agree with Julian, in that the structure suggests that all is not well on Planet Towry.

    Like many cancers, the symptoms are not always directly related to the underlying malaise, and clinical diagnosis is often met by denial and bluff.

    Having interviewed many Towry staff and supped with Mr Fisher on several occasions (yes, I used a long spoon), my take was that this entity has been formed with the single ambition of realising large profits on eventual floatation.

    In the interim, it has not practised what it has preached, has treated its staff and clients with cynical diregard and has kept the show on the road through liberal application of smoke mirrors, gaffer tape and unwise financial restructuring (the corporate version of pay-day loans).

    Such sophistry can only last for so long before this private equity vehicle goes off the road …..

  7. Becoming a headcase IFA 21st September 2012 at 9:45 am

    Hey, not so much stick and generalising about short balding men. they are not all megalomaniacs you know. Some are quite easy going I think.

    PS: Is 5′ 8″ short?

  8. @Anon 09.45

    At 5’8″, you (sorry, your friend) is just below the average male height of 5’9.6″.

    I am sure that there are some vertically-challenged individuals out there, who do not suffer from SMS, however, there are quite a few (particularly accountants) who do!

    ps, I’m 6’0″ and sometimes feel short against some people in the City …..

  9. Is it just me, but how can a company that is mired in debt be any good at providing sound financial advice?!

  10. Anonymous at 9.45 a.m. ~ Easy going is hardly the first phrase I’d use to describe you.

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