Asda credit card firm Jaja faces 15 per cent loan interest as debt pile swells
The company behind the Asda credit card has added to its debt pile after posting a widening loss. Jaja Finance, which operates the supermarket’s card alongside its own credit card services, has drawn down nearly £50m from a debt facility since March, for which it pays an eye-watering 15 per cent annual interest rate. That’s [...]
Asda credit card firm Jaja Finance is facing a 15% annual loan interest rate as its debt pile continues to grow. The company, which operates Asda's credit card alongside its own credit card services, drew down nearly £50 million from a debt facility since March, in addition to £42 million it borrowed last year. This year, Jaja posted a pre-tax loss of £35.8 million, a 30% increase from the previous year, while revenue rose by six percent to £12.4 million.
This means the business now pays more in debt interest than its entire annual turnover. Jaja Finance attributes the loss to "continued investment in operational infrastructure, customer growth and costs of acquiring and servicing the customers." The firm also tapped its shareholders for another £42 million in equity investment during the year.
Issa brothers acquired a majority stake in Jaja Finance in 2021, and the business began offering Asda's credit cards in 2022. Jaja's debts are managed by another company owned by a group called Pana Finance. The firm had planned to finalize a new debt structure, the "Falcon Master Trust," but has now opted for a new financing plan called "Project Ulysses" to provide more flexibility in accessing and structuring funding.
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