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Splitit (ASX:SPT) secures $197M credit facility from Goldman Sachs

Technology
ASX:SPT
05 February 2021 10:40 (AEST)
Splitit (ASX:SPT) - Former CEO, Brad Paterson

Source: Splitit

Splitit (SPT) has secured a US$150 million (roughly A$197.21 million) Receivable Warehouse Facility to support U.S. and European growth.

As a key part of the payment solution provider’s 2021 capital management strategy, the three-year revolving facility was signed with Goldman Sachs Bank USA, doubling the size of the company’s existing credit facilities.

With lower costs than Splitit’s other funding measures, the facility will be used to increase the company’s gross margins, fund merchants in major markets and provide a structure to facilitate additional jurisdictions.

According to the terms of the facility, 13 million warrants will be issued to Goldman Sachs in three equal tranches, exercisable at a price of $1.30 per share. Each tranche will expire five years after their respective issue date, with the first to be issued upon Splitit’s first use of the facility.

“This large committed facility from Goldman Sachs is a key pillar of our Merchant Sales Volume growth strategy,” said Brad Paterson, CEO of Splitit.

“Demand from merchants in the U.S. and Europe for our funded model has never been stronger, and coupled with our existing strong balance sheet, we now have the foundations in place to accelerate our growth plans whilst also driving improved margins,” he added.

The financing follows a successful fourth quarter of 2020, during which the company saw its merchant sales volumes grow 218 per cent year-over-year to US$86.3 million (roughly A$112.73 million), equivalent to the sales volumes processed in the whole of 2019.

Gross revenue soared to US$2.9 million (roughly A$3.79 million), representing a 359 per cent increase compared to the same period in 2019 and a 22 per cent increase compared to the prior quarter.

Splitit is up 3.45 per cent to $1.50 per share at 10:42am AEDT.

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