Yesterday, Credit Corp Group Limited [ASX:CCP] entered a trading halt, ahead of its market update announcement.
Before the trading halt, Credit Corp’s share price was trading at $22.19.
At the time of writing shares are trading 1.35% lower to $21.89.
The Australian debt collector announced a fully underwritten Institutional Placement to raise close to $100 million, as well as a non-written Share Purchase plan (SPP) to shareholders in Australia and New Zealand to raise around $10 million, jointly known as the ‘Offer’.
Proceeds from the offer are set to improve Credit Corp’s strategic position, fast track its expansion initiatives as well as adding more extra balance sheet flexibility.
Placement issue price is $20.45, a 7.8% markdown of the closing price on 29 March 2019.
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Credit Corp’s 2019FY market update
Despite decreased investment over the last two years, Australian and New Zealand core debt buying operation is still going strong, with cash collections seeing similar levels of that in the 2018 financial year.
Credit Corp has also upheld its compliance and sustainability metrics, putting it in a spot to take advantage of a correcting market.
The Group also saw increases to acquisitions and net lending under the 2019 financial year investment guidance, concerning its Purchase Debt Ledger (PDL).
Credit Corp’s share price 2019 outlook
Credit Corp is on target to deliver strong growth in earnings this year and more investment, as debt capacity places the Group for further growth.
Credit Corp’s CEO Thomas Beregi commented on the offer:
‘We are witnessing very favourable market conditions for Credit Corps business in Australia and the opportunity in the US continues to be increasingly attractive. Today’s equity raising provides the Group with flexibility and liquidity to take advantage of these opportunities, further bolstering the outlook for the business over the medium term.’
Investors could be likely to expect some medium-term improvements to Credit Corp’s share price, despite today’s dip.
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