The ASX-listed scrip of digital personal lender MoneyMe Limited continues to trade near record lows after the company announced it was renegotiating its funding arrangements and exploring options for raising fresh capital.
In an address to shareholders at the company’s annual meeting on Tuesday, MoneyMe chief executive Clay Howes revealed that the group had hired Morgan Stanley to help unearth new capital sources to fund business expansion and retire debt.
MoneyMe is a specialist lender of personal loans and car finance that acquired the operations of market rival SocietyOne earlier this year.
Its share price has come under intense selling pressure this year after a blowouts in loan impairments drove the company to a record bottom line loss of A$50 million.
Following rapid loan asset growth, MoneyMe has drawn $75 million on a facility provided by Pacific Equity Partners (PEP).
Howes told shareholders that the drawdown level was no longer optimal for the company.
“To address this, the group is negotiating binding legal documentation with PEP to put revised facility covenants in place in the second quarter of FY23 with a recalibration of covenant settings that reflect the more challenging capital market and operating environment, together with a commitment by MONEYME to meet agreed milestones relating to the progression and implementation of the strategic capital initiative,” he said.
“The group will also agree with PEP to repay $25 million of funding (plus associated costs) under the PEP facility in the second half of FY23 or the first half of FY24.
“This will restore the senior secured financing facility back to its original size of $50 million.”
Howes said MoneyMe was considering a broad range of capital and strategic initiatives including “strategic capital investment, partnership and other strategic transactions”.
Despite the company’s positive expectations, he warned shareholders there was no certainty that a transaction would eventuate.
He indicated that the repayment to PEP partly hung on the timing of the capital initiative.
This meant that the company would slow growth in the near term.
“We will continue to moderate our growth in the immediate term and have adjusted our customer acquisition strategy accordingly, which includes a reduction of our marketing spend that was used to launch our new brand and focus on our more cost-efficient acquisition channels,” Howes said.
MoneyMe’s share price on Tuesday closed down 1.5 cents or 4 per cent to 36 cents on thin volume.
In January the share price was trading above $2.