Australian small-business lender Prospa has announced that its proposed listing on the Australian Stock Exchange (ASX) has been postponed indefinitely after it received questions from corporate regulator Australian Securities and Investments Commission (ASIC).
In a statement, Prospa said it postponed its IPO following a consultation with joint lead managers UBS and Macquarie.
The startup said it received a letter from ASIC requesting information as part of a broader industry review of small business lending contract terms. The fintech lender said it understands that a similar review and consultation process is underway with the other major industry participants in the small business lending space.
“In response to this letter, the decision was made to pause the listing on Wednesday morning, 6 June 2018 to allow time to engage with ASIC and other stakeholders,” Prospa said.
Co-founded by Greg Moshal and Beau Bertoli in 2012, the startup had planned to raise A$146.5 million ($112 million) via the IPO. It sought to sell a 17.5 per cent stake to the public through the issue of new shares at A$3.64 per share, valuing the company at A$576 million ($438 million).
According to reports by Australian media, ASIC is investigating whether Prospa’s small business loans were compliant with industry regulations. The lender said it has “constructively engaged” with ASIC to review its current loan terms and has provided detailed information in response to the regulator’s queries.
Prospa said its major shareholders, including Entrée Capital, Square Peg Capital, and AirTree Venture Capital committed over A$47m ($35.8 milIion) to the IPO, equivalent to almost half of the new funds coming into the company, and continue to be fully supportive of the company.
“Prospa is satisfied that the issues discussed with ASIC are not material to the IPO and no additional disclosure is required in the prospectus. ASIC has not raised further queries on the prospectus,” the company said.
Prospa offers loans of between A$5,000 and A$250,000 to small businesses. Last year, the company announced the delivery of more than half a billion dollars into the Australian economy, providing loans to over 12,000 small businesses across the country.
“The company continues to perform strongly and May 2018’s originations were 23 per cent ahead of the prospectus forecast,” it added.
Last week, Taiwan-based M17 Entertainment, the parent company of Singapore’s dating and networking app Paktor, decided to delay its debut on the New York Stock Exchange after raising less than half of its $115-million IPO target.
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