Novatti simplifies business portfolio with divestment of Reckon stake
ASX-listed Novatti have announced that it has sold its 19.9% strategic stake in fellow listed fintech Reckon, and have made the full repayment of its $10.5 million corporate bond facility which will save Novatti approximately $1.1 million per annum in interest payments.
The sale is part of Novatti’s ongoing strategy to streamline their business and a review of assets as part of the broader strategy to achieve positive operating cash flow.
The Reckon stake has been divested at $0.40 per share for an aggregate price of $8.9 million. Since acquiring the stake in July 2021, Novatti has received $15.2m in cash dividends (ex franking credits), delivering a net gain of $1.5 million.
The current commercial partnership with Reckon will continue, introducing embedded payments to an increasing number of Reckon customers and profit-share for both companies.
Since Novatti issued the corporate bond, it has not been immune to rising interest rate pressure, so saving more than $4 million in interest payments over the next four years will support Novatti’s strategy to achieve positive operating cash flow by improving margins and controlling costs.
