ZIP Co Limited (ASX: Z1P), the Australian Buy Now Pay Later (BNPL) player, today announced the raising of $42.8 million via a placement of ~28,000,000 ordinary shares. The issue price was $1.53 which was at a 7.8% discount to company’s share price on 12 March and 7.8% discount to the previous 10 -day volume weighted average price of the shares traded on the ASX up to and including 12 March 2019.
The company’s issue was oversubscribed and closed early. The issue saw decent participation from institutional, sophisticated and professional investors. The shares are expected to be allotted and issued on 22 March 2019. The company in its press release highlighted that it had given notice to Westpac for the purpose of Westpac considering its top-up right. Westpac has time until 1 April to confirm if it would take up its entitlement. If Westpac does exercise its right, then Westpac will be entitled to subscribe for up to an additional 5.8 million shares at $1.53 for a total of $8.9 million.
Commenting on the successful placement of issue, MD and CEO, Larry Diamond stated that the additional equity capital would enable Zip to invest in brands, enhance their products, and monetise the assets and help the firm continue its growth trajectory. He also highlighted that post the capital raising, the company balance sheet is stronger and aid the company to capitalise on organic and inorganic growth opportunity.
Recently Z1P announced its 1HFY19 results and the company reported healthy growth in revenue, shares were trading up post the result.
The company also informed ASX that Zip’s shareholders would be given the opportunity to subscribe for shares; this would be at the same price as the issue price of $1.53 under a share purchase plan. The shareholders registered at 7.00PM on 13-March-2019 would be eligible to subscribe for up to $15,000 and raise up to a maximum of $5.0 million.
The company is focusing upon using the funds for accelerating growth and strengthen its balance sheet. The company intends to accelerate investment in core IP, capitalise on the in-store BNPL opportunity, drive customer acquisition and partner acquisition, move from pilot to rollout within New Zealand and expand product range. The company intends to drive $1 billion+ in annual transaction volume in FY19 and have 1 million+ consumers with an active Zip account.
On 13th March 2019, the company had requested for a trading halt with regards to the capital raising exercise, that the company announced today. Post the release the shares of the company are trading again on the ASX.
The stock has been in a strong uptrend in the recent past. The stock has moved up by 61.17%, and 30.71%, in the past three months and one month respectively.
The shares of Z1P are trading at A$ 1.685 on ASX, up by 1.506%, (As at Thu 14 Mar 19 02:57 PM).
ZIP Co Limited’s (ASX: Z1P) market capitalization stands at circa $522.96 million. The Stock has noted the 52-week high price of A$1.800 and 52-week low price of A$0.750. As per the latest ASX declaration, the company EPS stood at -0.049 AUD.
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