Foreign
exchange (FX) broker Argentex has agreed to be acquired by rival IFX Payments
in a deal valuing the troubled company at approximately £3 million, following a
severe liquidity crunch triggered by recent turmoil in global currency markets.
Broker Argentex Rescued by
IFX Payments After Dollar Crash
Argentex Group
Plc, a London-listed provider of currency risk management and alternative
banking services, was forced to suspend trading of its shares on April 22 after
a
sharp decline in the U.S. dollar led to significant margin calls and a
rapid deterioration in its liquidity position. The company, which had built up
substantial U.S. dollar exposures for clients without securing sufficient
collateral, was left exposed when the dollar fell to a three-year low against
major currencies.
To
stabilize operations, Argentex secured a £6.5 million bridging loan from IFX
Payments, which is also in discussions to provide further liquidity support.
The acquisition, recommended unanimously by the Argentex board, will see
shareholders receive 2.49 pence per share. Holders representing over 58% of
Argentex’s share capital have already pledged to support the deal.
“We are
very pleased to announce the proposed acquisition of Argentex, which will
enhance our regulated capabilities, diversify our product portfolio,
particularly in FX risk management and institutional offering, and further
expand our geographical reach and network,” Will Marwick, CEO at IFX Payments
said.
Zero-Collateral Bet
Backfires
The
company’s liquidity crisis was exacerbated by its use of “zero-zero” margin
arrangements, allowing some clients to trade without posting collateral. When
the dollar’s value dropped abruptly-driven
by new U.S. tariffs and critical remarks from President Donald Trump-Argentex
faced margin calls from its own banking partners but did not have corresponding
collateral from clients, leading to a cash shortfall.
Argentex’s
CEO, Jim Ormonde, resigned immediately ahead of the deal announcement. Chief
Operating Officer Tim Rudman has been named interim CEO as the company
transitions through the acquisition process.
It’s a week of big news for IFX Payments
We are pleased to announce we have reached an agreement in principle to acquire Argentex Group PLC. More information can be found on the link below
https://t.co/3H6H0xw99Q pic.twitter.com/0DdFTaJa36— IFX Payments (@ifxpayments) April 25, 2025
H2 2025
The transaction
is subject to regulatory approval and is expected to be completed in the
second half of 2025. IFX Payments, a cross-border payments and fintech firm,
aims to use the acquisition to expand its regulated FX capabilities and
institutional client base.
Argentex’s
board stated that the immediate cash value offered by the deal was preferable
to the limited returns shareholders might receive if the company entered
insolvency. The company had previously declined two other non-binding offers,
including one from Lumon Acquisitions.
The
acquisition comes amid heightened scrutiny from regulators. The Financial
Conduct Authority (FCA) has
recently stepped up oversight of liquidity risk management and contingency
planning among wholesale trading firms, following a series of market
disruptions.
Foreign
exchange (FX) broker Argentex has agreed to be acquired by rival IFX Payments
in a deal valuing the troubled company at approximately £3 million, following a
severe liquidity crunch triggered by recent turmoil in global currency markets.
Broker Argentex Rescued by
IFX Payments After Dollar Crash
Argentex Group
Plc, a London-listed provider of currency risk management and alternative
banking services, was forced to suspend trading of its shares on April 22 after
a
sharp decline in the U.S. dollar led to significant margin calls and a
rapid deterioration in its liquidity position. The company, which had built up
substantial U.S. dollar exposures for clients without securing sufficient
collateral, was left exposed when the dollar fell to a three-year low against
major currencies.
To
stabilize operations, Argentex secured a £6.5 million bridging loan from IFX
Payments, which is also in discussions to provide further liquidity support.
The acquisition, recommended unanimously by the Argentex board, will see
shareholders receive 2.49 pence per share. Holders representing over 58% of
Argentex’s share capital have already pledged to support the deal.
“We are
very pleased to announce the proposed acquisition of Argentex, which will
enhance our regulated capabilities, diversify our product portfolio,
particularly in FX risk management and institutional offering, and further
expand our geographical reach and network,” Will Marwick, CEO at IFX Payments
said.
Zero-Collateral Bet
Backfires
The
company’s liquidity crisis was exacerbated by its use of “zero-zero” margin
arrangements, allowing some clients to trade without posting collateral. When
the dollar’s value dropped abruptly-driven
by new U.S. tariffs and critical remarks from President Donald Trump-Argentex
faced margin calls from its own banking partners but did not have corresponding
collateral from clients, leading to a cash shortfall.
Argentex’s
CEO, Jim Ormonde, resigned immediately ahead of the deal announcement. Chief
Operating Officer Tim Rudman has been named interim CEO as the company
transitions through the acquisition process.
It’s a week of big news for IFX Payments
We are pleased to announce we have reached an agreement in principle to acquire Argentex Group PLC. More information can be found on the link below
https://t.co/3H6H0xw99Q pic.twitter.com/0DdFTaJa36— IFX Payments (@ifxpayments) April 25, 2025
H2 2025
The transaction
is subject to regulatory approval and is expected to be completed in the
second half of 2025. IFX Payments, a cross-border payments and fintech firm,
aims to use the acquisition to expand its regulated FX capabilities and
institutional client base.
Argentex’s
board stated that the immediate cash value offered by the deal was preferable
to the limited returns shareholders might receive if the company entered
insolvency. The company had previously declined two other non-binding offers,
including one from Lumon Acquisitions.
The
acquisition comes amid heightened scrutiny from regulators. The Financial
Conduct Authority (FCA) has
recently stepped up oversight of liquidity risk management and contingency
planning among wholesale trading firms, following a series of market
disruptions.
This post is originally published on FINANCEMAGNATES.
