Problems at Silicon Valley Bank do not just affect US companies. There are smaller companies on AIM and the Main Market that have facilities provided by the ailing bank.
Silicon Valley Bank sold up to $21bn in bonds, taking a loss of nearly $2bn, because of its need for cash. Trading in the bank’s shares was suspended on the Nasdaq in the US after the price fell by two-thirds. The bank is apparently looking for a buyer.
Many of the companies have loan facilities with other banks as well as Silicon Valley Bank. It is unclear if any have deposits with the bank. Here are some of the clients of Silicon Valley Bank, although some do not appear to be utilising the loan facility.
Molten Ventures (LON: GROW)
Venture capital firm Molten Ventures has a £150m debt facility with Silicon Valley Bank and JP Morgan Chase. The potential drawdown is based on 10% of the value of the investment portfolio.
This facility was put in place last September and a £90m three-year term loan was immediately drawn down. Gross portfolio value of the fully listed company was £1.45bn at the end of September 2022.
Aferian (LON: AFRN)
At the end of 2021, AIM-quoted Aferian secured a $50m loan facility from three banks, including Silicon Valley Bank, with potential for a further $50m and it lasts until 23 December 2024. At the end of May 202, the facility was undrawn and Aferian had net cash of $7.8m. This fell to $4m at the end of November 2022.
However, customer destocking of streaming devices has hit sales and they will be significantly lower than expected for this part of the business, although streaming video services revenues are growing. The annualised cost base is being reduced by $5m. There should still be a positive underlying EBITDA this year.
Annual results to November 2022 will be delayed while discussions with banks continue over future covenant compliance. There are no breaches of covenants yet.
Redcentric (LON: RCN)
Last June, managed services provider Redcentric secured a £100m loan facility from four banks including Silicon Valley Bank. The loan matures on 26 April. AIM-quoted Redcentric had drawn down £40m by the end of September 2022, when net debt was £39.3m. The cash was used for acquisitions. Net debt of £34.1m is forecast for March 2023. Pre-tax profit is expected to fall from £14.8m to £9.5m, before recovering to £18.7m next year.
Venture Life (LON: VLG)
In June 2021, AIM-quoted consumer healthcare products supplier Venture Life secured a £30m revolving credit facility, plus £20m accordion facility, from Santander and Silicon Valley Bank to fund further acquisitions. At the end of June 2022, £8.5m was drawn down – net debt was £3.1m. Since then, there have been further acquisition payments and net debt of £15.8m is estimated for the end of 2022, which could fall to £10m by the end of 2023 without further acquisitions.
Eagle Eye (LON: EYE)
Digital promotions and loyalty technology developer Eagle Eye secured a £5m revolving loan facility from Silicon Valley Bank, which was not drawn down at the end of June 2022. The AIM-quoted business is generating cash and net cash was £5.7m at the end of 2022. That is after a £7m placing and the acquisition of Untie Nots for an initial cash outflow of €9.1m.
eEnergy Group (LON: EAAS)
In April 2022, AIM-quoted energy-as-a-Service provider eEnergy Group secured a three-year £5m credit facility from Silicon Valley Bank. This refinanced existing borrowings. It appears that this facility has been drawn down. There was cash of £1.1m at the end of 2022.
Higher margin solar-related revenues were delayed into the second half of the financial year to June 2023. Interim revenues were 58% higher at £15.1m. Given the rate of growth, further finance is likely to be required.
Diaceutics (LON: DXRX)
Healthcare data technology services developer Diaceutics focuses on the precision medicines market. It has a £4m facility with Silicon Valley Bank, which matures on 16 July. The AIM-quoted company had no debt and cash of £19.8m at the end of 2022.
Yourgene Health (LON: YGEN)
At the beginning of 2022, AIM-quoted diagnostics firm Yourgene Healthcare entered into a three-year, £5m loan facility with Silicon Valley Bank. There was £4.1m drawn down by September 2022 when net debt was £1.7m.
A placing and retail offer raised £6.8m at 0.3p a share, after expenses. This was required for working capital and product development. That should provide the required cash for the business until at least the third quarter of 2023. Singer forecasts net debt of £2.2m by the end of March 2024. The Taiwan subsidiary is being sold and a strategic investor is being sought.
GetBusy (LON: GETB)
AIM-quoted document management and storage software developer GetBusy used to have a debt facility with Silicon Valley Bank, but this was cancelled at the end of February 2023 and replaced with a director loan facility of £2m.
PureTech (LON: PRTC)
Although fully listed and Nasdaq-quoted PureTech Health does not appear to have a direct relationship with Silicon Valley Bank, investee company Akili Interactive, a digital therapeutics developer, secured a credit facility of up to $50m in May 2021.
