Australia's Zip up on $146.2 mln financing, promise to pay down debt

Zip Co

18/07/2024 07:26

July 18 (Reuters) - Shares in buy-now-pay-later firm Zip
 ZIP.AX  rose more than 13% on Thursday after it said it had
raised A$217 million ($146.19 million) in equity placement,
letting the company pay down its corporate debts early.
    Zip completed a fully underwritten private placement of
A$1.56 a piece and said it will issue a non-underwritten share
purchase plan which could raise up to A$50 million.
    BNPL companies like Zip let clients split payments into
interest-free installments while purchasing and earn their
income from charging a commission from merchants.  
    Earlier this week the company flagged fourth-quarter
transaction volumes surging 19% to A$2.6 billion and revenue
raging 22.1% higher than last year. Zip's share price has nearly
tripled so far this year.
    On Thursday, the stock rose as high as A$1.815 by 0547 GMT,
logging its best trading session since Mar. 7.
    For Zip, the U.S. outperformed the other regions, with
quarterly revenue there jumping nearly 45% and transaction
volumes increasing by over 40%.
    Last year, Zip inked multiple prospective deals in that
country, saying it was the firm's largest opportunity due to a
horde of underserved customers seeking credit.
    "U.S. transaction volumes growth continued to outpace
expectations rising 42% in fourth quarter, we see further upside
as Zip penetrates higher spend verticals," analysts at UBS said
in a note. 

($1 = 1.4843 Australian dollars)

 (Reporting by Sneha Kumar; Editing by Nivedita Bhattacharjee)
 ((Sneha.Kumar@thomsonreuters.com;))