Global consumer finance provider Splitit Payments (ASX: SPT) has confirmed it will delist from the Australian Stock Exchange and re-establish itself as a new entity in the Cayman Islands.
The move will be funded by a proposed US$50 million investment by private equity firm Motive Partners and executed via a two-tranche placement at US$0.20 per share.
The first tranche will be issued once Splitit has delisted and moved its headquarters from Israel to the Cayman Islands.
It will become part of a reverse triangular merger whereby Splitit will merge into an Israeli subsidiary of a newly-formed entity incorporated in the Cayman Islands.
The second tranche will be issued upon Splitit achieving certain full-year financial performance milestones.
Long-term shareholder value
Splitit’s board of directors approved the proposed investment, saying it “represents the best available opportunity to create long-term shareholder value for numerous reasons”.
These include access to significant growth capital, the opportunity to partner with a top-tier financial sponsor and certain advantages to being a private company including lower administrative costs and a more flexible operating environment.
“Amidst a difficult fundraising environment and after considering strategic alternatives, [we have] secured a substantial investment that will significantly strengthen our capital position and accelerate the ability to attract large and sophisticated clients, develop strategic partnerships, and invest behind an innovative white-label technology platform,” the company said in a statement.
“Motive has a strong history of investing in market-leading companies and accelerating value creation… it is the ideal partner to help us drive future value creation due to its extensive payments expertise, value-additive capabilities and deep industry relationships.”
Existing shareholders will have the option of retaining their ownership in Splitit as a private company or decreasing their investment by offloading shares prior to completion of the delisting in late November.
Private trading platform
As a private company, Splitit expects to establish a presence on private share trading platform PrimaryMarkets to facilitate periodic trading in Splitit shares during the period following its delisting.
The company said there was no assurance or guarantee that PrimaryMarkets would have sufficient liquidity to facilitate the sale of Splitit shares.
