Fintech firm Sezzle launches A$86.3m capital raising to propel growth strategy

Maria Nikolova

The capital raising includes an institutional placement to raise A$79.1 million, followed by a non-underwritten Security Purchase Plan that aims to raise approximately A$7.2 million.

Installment payment platform Sezzle Inc (ASX:SZL) today announced a capital raising of approximately A$86.3 million in a move set to accelerate the company’s growth strategy and strengthen its balance sheet.

The capital raising includes a fully underwritten institutional placement to raise A$79.1 million, followed by a non-underwritten Security Purchase Plan (SPP) that aims to raise approximately A$7.2 million.

Priorities for the proceeds raised under the Capital Raise include:

  • Sales and marketing – additional business development and marketing personnel, and other related marketing costs;
  • Product enhancement and expansion costs – the hiring of additional developers and software engineers for enhancements and development of additional functionality within the Sezzle Platform and systems integrations;
  • International expansion opportunities – continued investment to support further market development in Canada and low cost testing in other markets; and
  • Strengthening the balance sheet – including the costs of potential debt facility refinancing, cost of the offer and increased cash reserves.

The pricing of the placement will be determined via a bookbuild process with an underwritten floor price of A$5.00 per CDI (Underwritten Floor Price). The Underwritten Floor Price represents a:

  • 28.1% discount to the last traded price of A$6.95 on Thursday, 9 July 2020; and
  • 10.0% discount to the 5-day VWAP of A$5.56 on Thursday, 9 July 2020

At the Underwritten Floor Price, Sezzle will issue approximately 15.8 million CHESS Depositary Interests (CDIs) under the Placement (Placement Securities), representing 8.9% of the Company’s existing issued capital. The Placement Securities are expected to settle on Wednesday, 15 July 2020, and will be issued and commence trading on the ASX on Thursday, 16 July 2020.

Following completion of the Placement, Sezzle will offer existing eligible CDI holders the opportunity to participate in a non-underwritten SPP to raise approximately A$7.2 million.

Under the SPP, eligible Sezzle CDI holders, being CDI holders with a registered address in Australia or New Zealand on Sezzle’s register as at 7.00 pm (Sydney time) on Thursday, 9 July 2020 (Eligible Holders), will have the opportunity to apply for up to A$30,000 of CDIs (SPP Securities) without incurring brokerage or other transaction costs. CDIs under the SPP are to be issued at the price paid by investors under the Placement.

The SPP offer period is expected to open on Friday, 17 July 2020 and is expected to close at 5.00pm (Sydney time) on Tuesday, 4 August 2020.

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