Wisr Ltd [ASX:WZR] is set to raise $55 million to grow its loan book, with $77.1 million loans originated in the first two months of Q4 FY21.
As we covered yesterday, Wisr share price entered a trading halt pending the completion of a capital raise.
Today, the fintech provided further details on the funding arrangement while also providing a trading update.
Before the halt, Wisr shares were trading for 32 cents a share, just shy of their 52-week high of 34 cents.
Source: Tradingview.com
WZR seeks $55 million
With Wisr expected to resume trading tomorrow, investors will be wondering how the market will respond to the fintech’s capital raise.
Wizr is hoping to raise $50 million in a fully underwritten institutional placement at 25 cents a share.
This will represent a 21.9% discount to WZR’s last closing price of 32 cents and a 20.7% discount to its five-day VWAP of 31.5 cents.
About 200 million new ordinary shares will be issued in the process, or 18.2% of Wisr’s existing shares on issue.
A non-underwritten share purchase plan will aim to raise a further $5 million.
Eligible shareholders can subscribe for new shares up to a maximum of $30,000 per eligible shareholder. The transaction will waive brokerage, commission, and transaction costs.
Wisr will allocate the proceeds to grow its loan book, invest in technology enhancement, and expand its total addressable market.
Source: Company presentation
WZR’s trading update: 234% loan origination growth
On top of the capital raise announcement, Wisr also provided a trading update today.
The fintech originated $77.1 million of new loans in the first two months ending 31 May 2021, up 234% from the $23.1 million recorded for the two months ending 31 May 2020.
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$35 million of the new loans were originated in April and $42 million in May.
Wisr reported that this sets the company up for its 20th consecutive quarter of growth.
Additionally, the company’s inaugural $225 million asset-backed securities (ABS) transaction reached settlement, ‘delivering a material reduction in Wisr’s cost of funds.’
We covered that transaction here.
The ABS transaction settled at a day one weighted average margin of 1.5% + 1m BBSW (Bank Bill Swap Rate).
This margin is an improvement on Wisr’s previous finance facility, with the company reporting it improved capital efficiency by ‘reducing the required equity contribution to 3.2% from 5.0%.’
Upbeat, WZR’s CEO Anthony Nantes commented:
‘It’s fantastic to see the continuation of our loan origination momentum.
‘Our growth to date has us in prime position to aggressively grow market-share, as we scale towards our medium-term target of a $1B loan book.
‘We’re delivering a clear competitive advantage through a superior alternative model that actually improves financial wellness, going far beyond the traditional lending experience to attract Australia’s most creditworthy customers.’
If small-cap fintechs are on your radar, I suggest making use of this particular report, which profiles three of them.
The report outlines and analyses a couple of fintech stocks you may not have heard of before.
You can download that right here.
Regards,
Lachlann Tierney,
For Money Morning
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