The IOUpay Ltd (ASX: IOU) share price was a strong performer this morning until fading in afternoon trade.
The payments company’s shares were up as much as 11.5% to 19.5 cents at one stage.
In late trade, the IOUpay share price is up 3% to 18 cents.
Why did the IOUpay share price jump higher?
Investors were buying the company’s shares this morning after the release of a positive announcement.
According to the release, IOUpay has secured a Malaysian Money Lending Licence which is required to comply with Malaysia’s Money Lending Act 1951 and Financial Services Act 2013. This licence will be used for the provision of buy now pay later (BNPL) service offerings to consumers and merchants in Malaysia.
The company secured the licence by acquiring 100% of the ordinary shares in licence holder Sibu Kurnia Marine in exchange for RM4,300,000 (A$1,375,000).
Management advised that it engaged two independent valuation experts and obtained formal valuation reports to determine an equity valuation of holder Sibu Kurnia Marine before settling on a buy price. Pleasingly, both reports provided values in excess of the final agreed consideration.
IOUpay believes this is an important milestone in the company’s plans to launch BNPL services in the country and notes that it is ahead of schedule.
The company’s chairman, Mr Lee Chin Wee, explained: “The completion of this critical milestone ahead of schedule enables the Company to now accelerate its plans to capitalise on the significant market opportunities in the BNPL and digital payments sectors as highlighted in our Corporate Presentation and Investor Update last year.”
“Notwithstanding the regional COVID-19 environment including the revised Movement Control Order (MCO) implemented by the Malaysian Government last week, the market conditions and demand for our product offerings remain strong which is consistent with the continued increased uptake in online purchases and payments across the South East Asia region last year,” he concluded.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.