The IOUpay Ltd (ASX: IOU) share price is heading south after coming out of a trading halt on Wednesday.
Earlier this morning, the Malaysia-based buy now, pay later (BNPL) provider announced an update on its investment in I.Destinasi Sdn Bhd (IDSB).
IDSB is a specialised finance company that provides instalment-based consumer credit services in Malaysia.
At midday on Wednesday, the IOUpay share price dropped 8.11% below yesterday's close before making up some ground. At the time of writing, IOUpay shares are fetching 17.8 cents apiece, down 4.05%.
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IOUpay moves ahead with planned investment
Investors are sending the IOUpay share price lower following a broader market sell-off on the All Ordinaries Index (ASX: XAO). The index is currently trading at 7,557 points, down 0.4% after some heavy losses recorded in Wall Street overnight.
In its announcement, IOUpay advised that it has satisfied all the required conditions to make its first payment for IDSB.
During September, IOUpay entered into a share purchase agreement to acquire a 42% interest in IDSB for approximately $41.3 million.
The terms of the deal would see the payment split into 2 equal tranches over a 6-month period.
As such, IOUpay tapped into its existing cash holdings to pay around $20.7 million to the vendors of IDSB. This represents 50% of the purchase price, or 21% of the shares in the total issued capital of IDSB.
The second tranche payment is due once the audit of IDSB's FY21 statutory accounts is complete, or within 6 months after settlement. The date, however, can be brought forward if IOUpay wishes to do so.
The company stated it will assess its cash position before making the final payment. It noted that it could conduct an equity capital raise as well as use its cash reserves to fund the second tranche.
About the IOUpay share price
Looking at the past 12 months, the IOUpay share price has gone nowhere, registering nil gains for the period.
The company's shares shot up in February, reaching a multi-year high of 85 cents, before gradually treading lower. More recently, the IOUpay share price hit a 9-month low of 15.5 cents on Monday.
IOUpay commands a market capitalisation of roughly $102 million at today's current share price.
