Openpay Group Ltd (ASX: OPY) (Openpay / the Company) is pleased to announce the completion of a $18.25 million two-tranche Placement “to accelerate its pathway to profitability in the ANZ business.”
ANZ CEO, Dion Appel said:
“Openpay ANZ is accelerating its pathway to profitability through sustainable growth, market-leading margins and business simplification. Australia is currently the engine room of the Company and we remain focused on delivering this plan. We appreciate the strong and continued support shown by existing shareholders, and new investors for the Placement and are pleased to welcome eligible shareholders to participate in the SPP on the same terms as the Placement to further accelerate our strategy.”
Proceeds from the capital raise will be used “to support Openpay’s ANZ strategy,” including:
- Acquisition of new merchants at scale in ANZ
- Acquisition of new customers at scale and increasing customer retention in ANZ
- Platform and technology enhancements
- Contribution to rapidly growing receivables book in ANZ
- Working capital in a rapid growth business, and facility repayment
Shaw and Partners Limited acted “as Lead Manager to the Placement with Ad Astra Corporate Advisory acting as Financial Advisor and Clayton Utz acting as legal advisor.”
The Company is pleased “to confirm it has received firm commitments from new and existing sophisticated institutional shareholders to raise approximately $18.25 million (before costs) via a two-tranche Placement.”
Approximately 76.0 million new fully paid ordinary shares in the Company (New Shares) will be “issued under the Placement, which represent 57.9% of Openpay’s existing issued capital.” New Shares will be “issued at an issue price of $0.24 per share,” which represents a:
- 18.6% discount to the last close ($0.2950) on Thursday, 19 May 2022; and
- 21.9% discount to the 7 Day VWAP ($0.3074) up to and including Thursday, 19 May 2022
As noted in the update, the Placement will occur in two tranches as follows:
- Unconditional Placement of 26.8 million New Shares to raise approximately $6.4 million under the Company’s existing ASX Listing Rule 7.1 and 7.1A Placement capacity, with settlement expected to occur on or about Friday, 27 May 2022 (Tranche 1); and
- Conditional Placement of 49.2 million New Shares to raise $11.8 million subject to and conditional upon shareholder approval to be sought at an Extraordinary General Meeting (EGM) expected to take place on or around Tuesday, 12 July 2022 (Tranche 2).
The company has “received cornerstone commitments from existing and new institutional shareholders to invest $16.0 million under the Placement.”
As part of the Placement, and “subject to shareholder approval, the Company has received cornerstone commitments from existing substantial shareholder and Director Mr Yaniv Meydan (or his associated entities) to invest $10.0 million under Tranche 2 of the Placement.”
Post the Placement, Mr Yaniv Meydan (or his associated entities) will “hold approximately 65.8 million shares representing 31.7% of the shares on issue.”
The company “acknowledges the investment by the Chairman, Patrick Tuttle of $100,000 (subject to and conditional upon shareholder approval).”
New Shares to be “issued under the Placement will rank pari passu with existing shares in the company.”
As mentioned in the update, Openpay intends “to offer a non-underwritten SPP to existing eligible shareholders to raise approximately $2.0 million.” The issue of New Shares under the SPP “is subject to shareholder approval, proposed to be sought at the EGM in July 2022.”
The SPP “allows eligible shareholders, being those shareholders that are residents of Australia or New Zealand that held Openpay shares at 7:00pm on Friday, 20 May 2022 (Record Date), to subscribe for up to $30,000 worth of New Shares without incurring any brokerage or transaction costs.”
New Shares will be “offered under the SPP at $0.24 cents per share, being the same issue price as the Placement.”
As the SPP is not underwritten, the SPP may “raise more or less than this amount. In the event that the subscriptions for more than $2.0 million are received for the SPP, the Company may decide in its absolute discretion to conduct a scale back of applications.” The scale back may be “applied to the extent and in the manner Openpay sees fit, which may include taking into account a number of factors, such as the size of an applicant’s shareholding at the Record Date, the extent to which the applicant has sold or purchased shares since the Record Date, whether the applicant has multiple registered holdings, the date on which the application was made and the total applications received from eligible shareholders.”
The terms and conditions of the SPP will be “contained in an offer booklet, which is expected to be lodged on the ASX on or about 26 May 2022 and sent to eligible shareholders shortly thereafter.”
Under ASX listing rules, Directors may “participate in the SPP if they are eligible shareholders. New Shares to be issued under the SPP will rank pari passu with existing shares in the Company.”
For more details on this announcement, check here.