CLS Finance Limited (“CLS”) and CR Services Limited (“CRS”) – in administration £5,000,000 Secured Loan Note Programme

HAMILTON, BERMUDA- 2May 2020 - In a filing today with the Bermuda Stock Exchange, CLS Finance Limited  (the “Group” or the “Company”), whose Secured Loan Note Programme is listed on the BSX, announced that the company is in administration. The full filing stated:

 CLS FINANCE LIMITED

 May 2020

CLS Finance Limited (“CLS”) and CR Services Limited (“CRS”) – in administration

 £5,000,000 Secured Loan Note Programme

CLS and CRS – as issuer and guarantor respectively of the secured £5 million loan note programme – are in administration following cessation of business as a result of the Covid-19 pandemic.

In light of the Covid-19 pandemic, the directors took the decision to discontinue new lending and place CLS into collection mode in relation to its current book. Its retail sales branch network (12 branches operated by related entity CRS) was closed on 20 March and the directors laid-off or furloughed all staff except for those involved in the in-house collection function, which continues to operate.

The directors subsequently advised its secured creditors of its intention to put the debtors’ book into run-off and made various requests regarding freezing of interest on their loans and priority of repayments. Following notification of this and concerns surrounding their exposure, on 25 March 2020, a secured creditor issued a notice of default and demand in respect of the repayment of its indebtedness. On or around this date, the secured creditor approached Lee Manning and Mark Supperstone of ReSolve Advisory Limited (“ReSolve”) with a view to acting as joint administrators of CLS. The secured creditor’s demand remained unpaid and accordingly, on 26 March 2020, a notice of appointment of administrators was filed with the Court, effecting the appointment of administrators of CLS on the same date.

During the course of the administration of CLS, investigations indicated that there was an outstanding intercompany balance owing from CRS to CLS, which was secured by way of a first ranking debenture in favour of CLS. LGB & Co. Limited (“LGB”) also held a cross guarantee and debenture over CRS in respect of its borrowings from CLS and accordingly served demand on CRS for payment. LGB approached ReSolve with a view to Lee Manning and Mark Supperstone of ReSolve also being appointed as joint administrators of CRS. Subsequently, on 15 April 2020 the administrators were also appointed as administrators of CRS by LGB as the holder of a qualifying floating charge over CRS.

 For further information, contact:

 Daniel Lawson: daniel.lawson@lgbco.com