Asda credit card firm Jaja Finance warns of ‘material uncertainty’ over going concern status
The firm behind the Asda credit card has warned of “material uncertainty” over its ability to continue as a going concern after reporting widening losses, CityAM can reveal.
Jaja Finance, a fintech co-owned by billionaire Mohsin Issa and private equity firm TDR Capital, said it had “substantially advanced” but not yet completed a new debt restructuring, creating uncertainty which “cast significant doubt on the group’s ability to continue as a going concern.”
Auditors S&W also drew attention to Jaja’s impairment assessment of its subsidiary investments, which it said “incorporates significant management judgement and estimation uncertainty about future cashflows.” The firm’s cashflow forecasts, which it said were “highly sensitive,” are dependent on estimates of the share of future customers who fall behind on payments.
Jaja, which has around a third of a million credit card customers including a portfolio of Bank of Ireland and Post Office accounts, said it hoped to complete its new debt securitisation as soon as October, adding it would work to extend the size and timelines of its existing debt facilities if the new arrangement did “not come to fruition.” The firm said it also had a non-binding letter of support from shareholders.
Greater debts, higher interest
Earlier this year the company’s parent, Ray Fintech, arranged a new £100m debt facility at an eye-watering 15 per cent interest rate. The payment-in-kind loan instrument is a higher-risk facility which allows a company to defer cash interest payments falling due on its existing debt pile. The company also extended its senior debt facility to £570m.
In accounts filed with Companies House, Jaja Finance more than doubled its impairment charges to £39.5m, a move it said was partly attributable to a change in its provision methodology to “better reflect” the likelihood of customers defaulting.
Jaja reported total income of £51m in 2024, a rise of 50 per cent on the previous year after it saw a jump in interest income, while total losses grew 8.5 per cent to £41.5m.
In a statement the FCA-regulated company said it “has a low tolerance for financial risk” and “no appetite to breach any regulatory capital threshold”, adding its “priorities include securing additional equity investment to support growth of the business and negotiating lower cost of funds on existing borrowing facilities.”
A Jaja spokesperson said: “We want to reassure our customers and partners that Jaja Finance remains fully committed to providing secure and reliable credit card services. As part of a proactive refinancing process – common across the financial services sector – we are working closely with stakeholders to strengthen our capital structure and support long-term growth.
“Our operations continue as normal, and our focus remains firmly on supporting our customers.”
Holborn-based Jaja Finance was founded in 2015 before the billionaire Issa brothers acquired a majority stake in the business together with TDR in 2021. The firm began offering credit cards on behalf of Asda in 2022 after the investment group bought the supermarket from Walmart. The following year, Jaja offered £20 in free Asda rewards vouchers to new customers. Zuber Issa has since sold his share to TDR.
Jaja’s debts are managed by another company owned by a group called Pana Finance, which raises wholesale debt via the Guernsey-based International Stock Exchange.
Jaja’s parent, Jersey-based Ray Fintech, was previously known as Phantom Investments but was renamed last year after MPs described the name as “synonymous with lies, deception and deceit.”
Asda company secretary Helen Selby said of the name: “I see it as a word. I don’t look beyond it. I wouldn’t not choose it.”