Zip (ASX:ZIP) invites noteholders for conversion, shares fall

December 13, 2022 03:36 PM AEDT | By Tamnna

Image source: © Timonschneider | Megapixl.com

What is Zip’s liability management exercise?

According to the company’s liability agreement exercise, Zip has invited its noteholders to receive Zip ordinary shares in turn for their existing notes. Under the agreement terms, existing notes will be converted at a conversion price of AU$12.0576 per share, and noteholders will receive a cash incentive price of AU$17,860 per AU$100,000 of existing notes.

Zip has intended to issue up to 5.8 million conversion shares under the conversion invitation, with a total cap of 15% of the total principal amount of the existing notes. The conversion invitation initiative is speculated to complete on or about 20 December, followed by the expected commencement of shares trading on 21 December.

Commenting on Zip’s liability management exercise, Peter Gray, co-founder and COO of Zip, said:

Data Source: Company announcement dated 13 December 2022

Details of equity placement

On 13 December, Zip also informed the market of completing its concurrent institutional equity placement. As a result, the company would issue 21,956,476 fully paid ordinary shares on 19 December for a fixed price of AU$0.62. The anticipated trading date for these shares is 19 December 2022. The cash contribution required by the conversion invitation, as well as any transaction charges, will be covered by this equity placement's profits.

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