Digital financial services company, Zip Co Limited (ASX: ZIP) has undertaken a number of changes to its funding facilities and capital structure which collectively strengthen Zip’s balance sheet, provide additional funding diversification, extend duration and further simplify the Company’s capital structure to support ongoing profitable growth.
Key points:
We are pleased to announce a suite of financing initiatives which further strengthen Zip’s balance sheet, provide financial flexibility and a strong platform for ongoing profitable growth,” CEO and Managing Director, Cynthia Scott, said.
“The new corporate facility will be used to refinance our existing corporate debt – providing the Group with corporate funding certainty for the next four years, and concurrently allow Zip to undertake an incentivised conversion and repayment of the CVI Convertible Notes.
“In addition, with the outstanding face value of the Senior Convertible Notes having now reduced to $85 million, we have seen a further strengthening of the balance sheet and simplification of Zip’s capital structure. The successful refinancing of our US and Australian receivables funding provides headroom for receivables growth and demonstrates support from new and existing investors.”
Zip has executed an agreement for $150 million to refinance its existing corporate debt with funds managed by Ares Management Corporation, a global alternative investment manager, providing corporate funding certainty, diversification and duration to the Company. Proceeds from the facility will be used to repay Zip’s existing corporate facility, fund the cash component of the incentivised conversion of the outstanding CVI Notes, and provide additional liquidity to support growth. The term of the facility will be four years, with the option at Zip’s discretion to refinance or repay the facility prior to maturity.