The company behind the Asda credit card has flagged "material uncertainty" regarding its capacity to remain operational after recording expanding losses, City AM can disclose.
Jaja Finance, a fintech venture co-owned by billionaire Mohsin Issa and private equity house TDR Capital, revealed it had "substantially advanced" but not yet finalised a fresh debt restructuring, generating uncertainty which "cast significant doubt on the group's ability to continue as a going concern," as reported by .
Auditors S&W also highlighted Jaja's impairment evaluation of its subsidiary investments, which they stated "incorporates significant management judgement and estimation uncertainty about future cashflows."
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The company's cashflow projections, described as "highly sensitive," rely on calculations of the proportion of future customers who may default on payments.
Jaja, which serves approximately a third of a million credit card holders including a portfolio of Bank of Ireland and Post Office accounts, expressed hopes to finalise its new debt securitisation by October, noting it would seek to expand the scale and timeframes of its current debt facilities should the new arrangement "not come to fruition."
The business confirmed it also possessed a non-binding letter of support from shareholders.
Greater debts, higher interest
Earlier this year the firm's parent company, Ray Fintech, secured a fresh £100m debt facility carrying a staggering 15 per cent interest rate. The payment-in-kind loan structure represents a higher-risk arrangement enabling the business to postpone cash interest payments due on its current debt burden.
The business also expanded its senior debt facility to £570m.
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In filings lodged with Companies House, Jaja Finance more than doubled its impairment charges to £39.5m, a decision it attributed partly to modifications in its provision methodology designed to "better reflect" the probability of customer defaults.
Jaja recorded total revenues of £51m in 2024, representing a 50 per cent increase from the prior year following a surge in interest earnings, whilst overall losses expanded by 8.5 per cent to £41.5m.
In a statement, the FCA-regulated business emphasised it "has a low tolerance for financial risk" and maintains "no appetite to breach any regulatory capital threshold", noting its "priorities include securing additional equity investment to support growth of the business and negotiating lower cost of funds on existing borrowing facilities."
Jaja Finance, based in Holborn, was established in 2015 before the billionaire Issa brothers, along with TDR, acquired a controlling stake in 2021. The company started providing credit cards on behalf of Asda in 2022 after the investment group purchased the supermarket from Walmart.
In the subsequent year, Jaja offered new customers £20 in free Asda rewards vouchers. Zuber Issa has since divested his stake to TDR.
The debt obligations of Jaja are handled by another firm owned by a consortium known as Pana Finance, which raises wholesale debt through the Guernsey-based International Stock Exchange.
Ray Fintech, the parent company of Jaja based in Jersey, was formerly known as Phantom Investments but underwent a name change last year following MPs' description of the name as "synonymous with lies, deception and deceit."
Asda's company secretary, Helen Selby, commented on the name, stating: "I see it as a word. I don't look beyond it. I wouldn't not choose it."