$10.5m in new growth funds to unlock larger markets for Novatti
ASX-listed Novatti Group, a leading fintech enabling businesses to pay and be paid, has announced that it has secured commitments for $10.5 million in new growth funds through a corporate bond issue.
As flagged in its June quarter update, Novatti has been considering ways to unlock further growth funds, including by leveraging its assets to avoid shareholder dilution.
The $10.5 million in new funding will enable Novatti to unlock new and larger market opportunities as well as increased transaction volumes. The primary purpose of the bond issue is to support collateral requirements from industry partners and banks as Novatti grows.
The new funding follows Reckon’s announcement of its first half year results on 09 August 2022 including a 3 cent dividend realising circa $675,000 for Novatti and the further detail of a special dividend in the range of 54 cents to 58 cents for which Novatti could expect to receive circa $12.5 million.
This bond issue was arranged by BCI Australia and has been fully subscribed to by institutional investors. BCI will receive transaction fees of 3.5% of the bond offer proceeds plus customary out of pocket, trustee and Austraclear fees and expenses.
The bonds are secured and will be issued for a fixed term of five years from the date funds are received by Novatti, with interest at 90 day BBSW plus 650bps. Completion of the issue occurred on 12 August 2022.
Novatti’s Managing Director, Peter Cook, said, “This $10.5m in new funding will enable Novatti to further its growth by taking on new and larger markets and transaction volumes and support its funding for the bank licence, where we remain confident of progress being made in securing final approvals.”
“Importantly, these funds and the circa $12.5m special dividend we expect to receive from Reckon Limited, will enable Novatti’s business to continue to expand without diluting existing share capital. Our focus on becoming cashflow positive continues.”
“This bond issue highlights the strength of Novatti’s existing business and future prospects and was fully taken up by institutional investors.”
Disclosure: At the time of writing, Australian FinTech Pty Ltd is a shareholder of Novatti Group Limited.
