Solaris struggles to raise funds to meet major credit card contract - FT

German Banking-as-a-Service outfit Solaris is struggling to raise fund to execute on a major credit card contract with Munich-based motor association Adac, the FT reports.

Solaris last year won a 10-year contract to issue Adac-branded credit cards to the club’s 21mn members. The company expected the contract to boost annual sales by more than €100mn, from last year’s revenue of €130mn.Solaris reported a €56 million loss for fiscal year 2022. The company last raised €38 million in July, but now needs to raise an additional €100 million in funding as part of an upfront payment to Adac and to meet regulatory capital requrements for taking on the motor association’s €500 million loan book.Talks between Solaris and existing backers including US credit card group Visa and Spanish lender BBVA, about the additional €100mn required to deliver on the contract are ongoing but have been delayed by the adverse market environment, says the FT, citing people with knowledge of the situation.“We will need additional capital next year and are in ongoing talks with investors about that,” Solaris told the broadsheet.The FT has learned Adac has contacted DKB, Deutsche Bank and Hanseatic bank — which all bid for the original contract — to see whether they would consider teaming up with Solaris. One option under discussions involves one of those banks taking over the €500mn loan book on its balance sheet, reducing the need for Solaris to find additional regulatory capital.Negotiations between Solaris, the motorists’ association and potential partners are ongoing and should be concluded by the end of the year, some of the FT’s sources said.

By on Tue, 26 Sep 2023 11:53:00 GMT
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