Naked Wines

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Naked Wines is searching for a new financing partner following the collapse of Silicon Valley Bank, but the wine delivery firm said this morning its day-to-day operations remained unaffected by the situation.

The collapse of the bank, which specialised in lending to tech companies and start-ups, sent shockwaves across markets on Friday, creating uncertainty for businesses around the world.

A detailed statement from Naked Wines this morning confirmed the US tech bank was its banking partner and that the business held cash in a variety of SVB accounts in the US and the UK.

Naked does not expect to incur any loss resulting from the bank’s failure and added its liquidity position was “robust”, with £32m gross cash on hand and £17m immediately available.

CEO Nick Devlin said: “We are announcing today that day-to-day operations are unaffected and we don’t expect to incur any loss as a result.

“Whilst this situation remains fluid, we maintain a robust balance sheet with approximately £185m of stock and £17m of immediately accessible cash. We remain focussed on delivering for our customers and winemakers and continuing to execute against the pivot to profit strategy announced in October.”

SVB was also the administrative agent and issuing lender for the group’s $60m asset-backed credit facility, which is syndicated 50-50 with Bridge Bank.

Naked said Bridge Bank remained “supportive” of the group, but the business added it had started a process to identify potential new financing partners.

Naked added it assessed that less than £600k in cash was “at risk” and potentially uninsured due to the SVB closure, with £14m held in a cash sweep account under which SVB acts as custodian for third-party money market funds.

The group expected to be entitled to a return in full of these funds after completing any procedures required by the US Federal Deposit Insurance Corporation.

The US Treasury and Federal Reserve also issued a joint statement advising that depositors would have access to all money starting this morning (13 March).

Naked said it did not know with certainty the timeframe in which it would gain full access to these funds.

Shares in Naked dropped 1.9% to 96.6p as markets opened this morning.

Morning update

HSBC also announced this morning that it had agreed to buy the UK arm of SVB, providing certainty for tech firms in the UK. Customers and businesses will be able to access money deposited in SVB UK as a result, with other banking services operating as normal.

Dozens of listed businesses issued statements to the London Stock Exchange this morning regarding exposure to SVB.

In the food and drink space, the only other statements came from THG and Eagle Eye Solutions Group.

THG said it had no exposure to the bank, while Eagle Eye detailed a £5m loan facility held with SVB UK.

Eagle Eye added it had drawn down £2m of the facility but had no requirements to draw down any further.

The group had no cash deposits with the bank in the UK but some funds were deposited in the US. However, the board said, following the statement from the Treasury and Federal Reserve, that there would be no impact to the group.

The FTSE 100 slumped another 1.2% this morning to 7,655.60pts as markets across the world weighed up the consequences of SVB’s failure.

Early fallers in food and drink, included Nichols, down 3.1% to 1,049.3p, Science in Sport, down 3% to 13.1p, Kerry Group, down 2.8% to €89.42, and Glanbia, down 2.3% to €12.72.

Deliveroo led the risers, up 3% to 92.3p, while Bakkavor increased 2.7% to 106.8p, THG is up 1.2% to 62.8p and Finsbury Food is up 1% to 103p.

This week in the City

The biggest news of the week is set to the Jeremy Hunt’s Budget Statement on Wednesday.

Tomorrow also brings interims from Virgin Wines UK and Eagle Eye Solutions.

The latest UK inflation figures are due out on Wednesday.

The much-anticipated full-year results from the John Lewis Partnership (and Waitrose) will arrive on Thursday morning, with finals also from Deliveroo.