Sezzle share price jumps 28% after completing $79.1 million institutional placement

The Sezzle Inc (ASX:SZL) share price is jumping higher on Monday after completing its $79.1 million institutional placement at $5.30 per share…

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The Sezzle Inc (ASX: SZL) share price has returned from its trading halt and stormed higher this morning.

At the time of writing the buy now pay later provider's shares are up a massive 28% to a record $8.88.

Why was the Sezzle share price in a trading halt?

Sezzle requested a trading halt late last week so it could follow the lead of rival Afterpay Ltd (ASX: APT) by launching a capital raising.

The company's capital raising comprised a fully underwritten institutional placement to raise $79.1 million (US$55 million) and a non-underwritten share purchase plan (SPP) that aims to raise approximately $7.2 million (US$5 million).

This morning Sezzle announced that it has successfully completed the institutional component of its capital raising. It raised $79.1 million via the issue of 14.9 million shares at $5.30 per share. This compares to the underwritten floor price of $5.00 per share.

The issue price represents a sizeable 23.7% discount to the last traded price of $6.95, but just a 4.6% discount to the five-day volume weighted average price of $5.56.

Sezzle's Executive Chairman and CEO, Charlie Youakim, was pleased with the success of the placement.

He said: "We appreciate the continued support of our existing institutional investors, particularly those that have remained as CDI holders and supporters since our ASX IPO, around one year ago. It has been a hugely successful period for all Sezzle stakeholders and we thank these investors for the trust placed in the Sezzle management team and Board over that time, and also now for their ongoing endorsement."

"We also recognise the support from the new institutional investors who participated in the Placement and their embracing of Sezzle management's long-term vision and strategy to deliver returns over the coming years".

Why did Sezzle raise funds?

Sezzle advised that proceeds from the capital raising will be used to accelerate its growth strategy and strengthen its balance sheet.

Mr Youakim added: "As a result of the Placement and the additional capital Sezzle is intending to raise under the SPP, Sezzle is now in an even stronger position for all of its investors, and very well placed to accelerate its growth strategy and undertake investment in initiatives to drive long-term value creation."

The company will now push ahead with its non-underwritten share purchase plan. This aims to raise approximately $7.2 million (US$5 million), bringing the total raised to $86.3 million (US$60 million).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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