- IOUpay has announced a successful capital raise of A$10,055,300 under a private placement with binding commitments secured from its existing and new investors.
- Led by Barclay Pearce Capital Pty Ltd, the placement involves two tranches of amount A$3,000,000 and A$7,055,300 at a combined issue price of A$0.16 per share.
- The Company intends to use the capital raised towards administrative and working capital purposes along with a focus on new and existing product development.
- Chairman Aaron Lee has expressed the Company’s delight towards receiving strong market response regarding the growth plans to become a leading player in the digital payments space in South East Asia.
Fintech solutions provider IOUpay Limited (ASX:IOU) has successfully secured binding commitments for A$10,055,300 under a private placement supported by its existing and new investors.
The funding round was led by Barclay Pearce Capital Pty Ltd. The capital was raised in two tranches. An amount of A$3,000,000 was approved on 30 September by shareholders at the Company’s General Meeting with A$7,055,300 raised additionally in Tranche 2, utilising IOUpay’s existing capacity under ASX Listing Rule 7.1.
The two-tranche placement resulted in the Company issuing around 62.85 million ordinary shares. The Company issued 20,408,163 shares in Tranche 1 and 42,437,462 shares in Tranche 2.
Strong investor demand for additional shares under the Tranche 1 funding of the approved A$3,000,000 limit coerced the Company to issue additional shares at a higher issue price under its ASX LR7.1 placement capacity.
Commenting on the capital raising completion, Chairman Aaron Lee mentioned that the Company is feeling elated to witness such strong response from the market regarding the plans to attain a leading position in the digital payments space in South East Asia. The capital raising is another milestone for IOU towards expanding its product offerings, both new and existing.
Pricing and Application of Funds
The total placement highlighted a blended price of A$0.16 per share. The offering price represented an 18.45% discount to the 5-day VWAP (volume weighted average price) prior to the date of the placement.
The Tranche 1 placement amounting to A$3,000,000 was issued at the offering price of A$0.147, representing a 25% discount to the 5-day VWAP before the placement date as per the specific shareholder approval received at the EGM.
The Tranche 2 placement of A$7,055,300 was issued at an offering price of A$0.166, representing a 15.31% discount to the 5 day-VWAP prior to the date of the placement.
The Company intends to use the capital raised from the Tranche 1 towards professional services, salaries, administration expenses, digital payment inventory, marketing development, and product development, as approved by shareholders at the EGM.
The additional funds raised from the Tranche 2 placement are expected to be utilised to expedite growth required in digital payment inventories and new product development, in addition to funding working capital requirements across the Group.
As approved by the shareholders, Barclay Pearce is expected to receive 20,000,000 options as Lead Manager Options from the Company on completion and settlement of the placement. The options have 12 months expiry time from the date of the granting and an exercise price of A$0.04, which on exercising entitles the holder to subscribe for one fully paid ordinary share.
IOU has witnessed a stock price rally of more than 2000% in the last six months ended 9 November 2020. The price rally was experienced on the back of business achievements and initiatives undertaken by the Company during the period. Apart from changing its name, the Company introduced the new BNPL offering and made changes to the management team.
The stock closed at A$0.215 on 9 November 2020, up 10.256% from the previous close.