Naga revealed today that it will restructure the group amid continued uncertainties in the capital markets and specifically the cryptocurrency space. The company highlights that no additional funding should be required to carry out the restructuring process.
The aim of restructuring is to improve profitability in Naga’s consolidated companies through cost savings of 60-70% compared to FY18. According to NAGA, the company will incur extraordinary expenses during the restructuring process and its effects will be fully visible in FY20.
The company says it will now focus on the organic growth of its customer base and profitable social trading platform, NAGA Trader. On one hand, the increased emphasis on the company’s only fully marketed and profitable product should be appreciated. On the other hand, the company’s previous investment story around building a comprehensive Naga ecosystem seems no longer intact.
As part of the restructuring, Naga will shift all operational tasks to the group’s location in Cyprus and reduce its operations and personnel in Germany and Spain. One of the current management board members and the company’s largest shareholder, Yasin Qureshi, will become chairman in a new advisory board that will focus on strategy, innovation, business development and M&A after April 2019. As a result, the management board will now consist of two instead of three members.
It’s worth noting that nearly 90 % of the company’s share capital is subject to a lock-up agreement that is valid for the next 18 months.