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- Zip Co (Z1P) opens a share purchase plan (SPP) to investors to raise $50 million
- Shareholders can subscribe for up to $30,000 worth of new shares for the lesser of $1.90 or a 2 per cent discount to Zip’s volume weighted average price
- The news follows completion of an institutional placement which saw investors raise $148.7 million before costs
- Zip says proceeds from the placement and SPP will go towards helping the company strengthen its balance sheet and position it for sustainable growth
- Z1P shares were flat at $1.71 in early trade
Buy now, pay later specialist Zip Co (Z1P) has opened a share purchase plan (SPP) to investors to raise $50 million to strengthen its balance sheet for growth.
Shareholders who were on the company register from Friday 25 February can subscribe for up to $30,000 worth of new shares. The offer price is $1.90 or a 2 per cent discount to the volume weighted average price of Zip’s shares on the five days leading to the purchase plan closing date of Friday 1 April, 2022, whichever is the lesser.
The SPP is not underwritten, and Zip maintains the option to increase this cap and accept oversubscriptions or scale back applications at its discretion.
The news follows the completion of an institutional placement which saw institutional, sophisticated and professional investors raise $148.7 million before costs, at an issue price of $1.90.
The placement was undertaken in conjunction with Zip’s announcement that it had entered into a definitive merger agreement to acquire fellow buy now, pay later operator Sezzle Inc through an all-scrip transaction.
If the SPP does not reach its goal, proceeds of the fundraising will still be used by Zip to help strengthen its balance sheet and position Zip for sustainable growth and for general working capital purposes.
Z1P shares were unchanged at $1.71 in early trade.
