Zip announces $267 million capital raise to repay debt
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The news: Zip has announced a $267 million capital raise to repay its existing corporate debt facility and to support future growth.
The numbers: The raise consists of a fully underwritten $217 million share placement to help repay the debt facility, along with a non-underwritten share purchase plan worth $50 million.
A maximum of 142,763,158 ordinary shares will be issued at a base price of $1.52, compared to Zip's last close of $1.60 per share.
Zip also announced that its fourth quarter revenue was up 22.1% to $223.6 million compared to the year prior. Its transaction volume grew 19% to $2.6 billion.
Its normalised group cash EBTDA for the quarter was expected to be in the range of $22 million to $25 million, which would bring the FY24 figure to an expected range of $67 million to $70 million.
The context: The buy now pay later fintech started 2024 strong with a stock market surge, before being upgraded to ‘buy’ by Citi analysts in March. Zip indicated in today’s investor presentation tackling its debt through a raising would set it up to continue its momentum.
What they said: "The equity raising we have annoucned today will further strengthen our balance sheet, optimise our capital structure and provide additional flexibility for Zip to deliver on its growth plans," said Zip group CEO and MD Cynthia Scott.
The source: ASX announcement
