The firm took point on the structuring and design of the convertible notes and warrants for the raising effort
Ashurst has confirmed its role in the $200m capital raising that is set to help ASX-listed buy-now-pay-later (BNPL) company Zip Co Limited in expanding to the US market.
The firm advised CVI Investments, Inc., an affiliate of US growth investor Heights Capital Management, in working with Zip Co on the raising effort. Heights Capital Management is an affiliate of global financial services firm Susquehanna International Group, which has invested in companies like Bytedance, TikTok’s parent company.
Zip Co recently announced its intent to acquire New York-based BNPL brand QuadPay Inc for $403m; in line with this deal, the company also announced a capital raising that would involve the issuance of $100m convertible notes and the exercise of over 19m warrants.
Ashurst confirmed that its team spearheaded the structuring and design of the convertible notes and warrants.
“The convertible notes have an initial conversion price which is at a 50% premium to the VWAP on the last trading day prior to signing the agreement, and the warrants have an initial exercise price at a 40% premium to that VWAP,” the firm said.
If fully exercised at the initial exercise price, the aggregate total of the equity raised would hit $200m.
“This form of equity-linked capital raising in the Australian markets will appeal to high-growth companies looking to raise funding at a premium to their current market share price and to investors looking to invest in high-growth companies with significant upside in the form of a debt instrument,” Ashurst said.
The firm’s team comprised members of the firm’s corporate, capital markets and tax practices across the Hong Kong, Sydney and Melbourne offices. Partners Jini Lee, Sarah Dulhunty, Caroline Smart and Ian Kellock led the team alongside consultant Nigel Pridmore.
They were supported by counsel Bronwyn Kirkwood, senior associate Miao Qun Unsworth-Tang and trainee solicitor Joanne Tsoi.
Arnold Bloch Leibler advised Zip Co on the deal, working alongside US firm Skadden, Arps, Slate, Meagher & Flom. The transaction is pending approval from Zip Co’s shareholders, while the terms of the convertible notes and warrants are awaiting ASX approval.