Show me the MNY! Brokers cross investors for Money3 deal. News03 Dec 2020

Non-bank lender Money3 is going after some cash of its own.

 

The ASX-listed company's brokers were lining up fund managers for an equity raising on Wednesday night, seeking their early thoughts and demand for a $50 million deal slated to formally launch on Thursday.

 

It is understood brokers Bell Potter and Shaw and Partners were on hand for the raising and the money raised was pegged for potential acquisitions and to finance organic growth opportunities.

 

While pricing was moving around on Wednesday night, sources said it was likely to land at close to $2.70 a share which would be a 9 per cent discount to the last close of $2.96.

 

Money3 offers clients personal loans up to $12,000 – for expenses like car repairs, medical procedures, weddings and the like – and car/vehicle loans up to $50,000.

 

The $550 million company had a $456 million loan book as of November this year, according to a quarterly update lodged last month. That book has been building at 32 per cent a year, on a compound annual growth rate basis, since the 2015 financial year, when it was sitting at $107 million.

 

Meanwhile, Money3's revenue grew to $124 million in fiscal 2020, from $91.7 million in the 2019 financial year, according to company's full year results lodged in August this year.

 

At that time, Money3 was sitting on $65 million in available funds – both cash and un-utilised debt facilities.

 

 

The kingmaker in pricing this capital raising will probably be entities associated with billionaire investor and Rich Lister Alex Waislitz, which own almost 14 per cent of the company.

 

News of the raising comes a week after Money3 announced it had secured a $250 million warehouse facility from an "A+ rated global bank", which Baillieu analysts identified as Credit Suisse.

 

The company said the new facility would reduce Money3's funding costs by $10 million a year, or 400 basis points.

 

Shaw and Partners analysts labelled the facility a "game-changer from both a market share and shareholder returns view".

 

"Alongside existing facilities Money3 now has access to grow finance facilities by a further 165 per cent," they said.

 

"Expect Money3 to dominate sector growth, make acquisitions in the space and increase distributions to shareholders as the ROE grows."

 

Money3 shares are trading up almost 30 per cent year-to-date, and closed on Wednesday at $2.96, just shy of a $3.08 pre-COVID high in February.

 

Article source: AFR, 3 December 2020

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