China Rapid Finance Limited (NYSE: XRF), one of China’s largest consumer lending marketplaces, announced earlier this week that it has reached a non-binding letter of intent on investment and cooperation with SOS Health Rescue Services Ltd. According to China Rapid Finance, the duo may enter into a merger or similar transaction in which SOS or its stockholders will own a controlling interest of the outstanding equity in XRF.
China Rapid Finance further revealed if the merger is completed it will allow XRF to enter consumer health services and healthcare-related financial services. China Rapid Finance added the transaction is subject to numerous conditions and there is no assurance that such a transaction will be consummated on the terms and timeline indicated. XRF and SOS are targeting the signing of the initial agreement by the end of March 2020.
Founded in 2001, China Rapid Finance claims it operates one of China’s largest consumer lending marketplace in terms of the total number of loans, having facilitated more than 27 million loans to over 3.7 million borrowers at a significantly lower borrowing cost than many competitors.
“China Rapid Finance operates a pure play marketplace, and does not take credit risk. The Company utilizes its technology to efficiently select quality EMMAs for its platform. China Rapid Finance offers smaller, shorter-term initial loans to these EMMAs and then offers larger, longer-term loans to repeat borrowers who demonstrate positive credit behavior.”