Sabien Technology Group Secures New Factoring Facility from Chairman's Family Office

Security via a debenture strengthens PGL’s position

The facility will be secured by a debenture – a form of security over company assets. That enhances PGL’s protection if anything goes wrong and may rank PGL ahead of unsecured creditors. From a shareholder perspective, it is good for liquidity but it increases secured claims over the Group’s assets.

Governance: related party checks in place

Because PGL is controlled by the Executive Chairman, this is a related party transaction under AIM Rule 13. The Independent Directors – Ed Sutcliffe, Charles Goodfellow and Ranald McGregor-Smith – after consulting the Company’s nominated adviser, Allenby Capital, consider the terms fair and reasonable. That is the required safeguard in this situation.

My take on the facility: pragmatic liquidity, priced for speed

On balance, this is a pragmatic move for a company leaning into growth. If orders are expanding and debtors are healthy, converting invoices to cash at 80% upfront is a straightforward way to scale without issuing equity. It also keeps the facility tightly linked to real sales rather than speculative runway.

The flip side is cost and concentration. At 2.5% per month, you want invoices to turn quickly; the longer they sit, the more it bites. The debenture and the fact that this is another facility from the Chairman’s family office underline Sabien’s reliance on insider funding. That is fine if the business continues to execute and trade debtors pay on time, but it is a dependency to watch.

Positives I see

• Aligns funding directly with revenue growth in M2G Cloud Connect.
• Non-recourse structure reduces collection risk on assigned invoices.
• No equity dilution implied in this announcement.
• Independent Directors and NOMAD have signed off the terms as fair and reasonable.

Risks and trade-offs

• High cost of capital relative to bank facilities – could pressure margins if widely used.
• Security via debenture elevates secured creditor claims ahead of equity.
• Dependence on a related party for liquidity; limited disclosure of size and limits.
• Subject to final contract – terms could evolve or conditions could exist in the final agreement.

What to watch next

• Finalisation of the contract – timing and any additional covenants or caps.
• Utilisation – how much of the sales ledger is factored and for how long.
• Cash conversion – debtor days and collection performance on M2G Cloud Connect invoices.
• Gross margins – whether the funding cost materially impacts reported margins.
• Alternative funding – any move to diversify beyond the Chairman’s family office.
• Further disclosure – size, duration, or limits of the facility are not disclosed here; clarity would help investors size the impact.

Quick glossary for this RNS

• Invoice factoring: selling or assigning invoices to a financier in exchange for an upfront cash advance, repaid when the customer pays.
• Non-recourse: the financier bears the risk of non-payment on assigned invoices, rather than the company having to buy them back.
• Debenture: a form of security over a company’s assets granted to a lender to secure obligations.
• Related party transaction: a deal with a director or connected party; requires independent board review under AIM Rule 13.

Bottom line

Sabien is choosing speed and certainty of cash over cost, using a related-party non-recourse factoring facility to turn sales into working capital. If M2G Cloud Connect demand is indeed growing, this should help fulfil the order book faster. Investors should keep an eye on how heavily it is used, the collection cycle, and any future shift toward lower-cost, non-related funding once scale is achieved.