The Openpay Group Ltd (ASX: OPY) share price has returned from its trading halt and tumbled notably lower.
In afternoon trade, the buy now pay later (BNPL) provider’s share are down 13% to a new low of 25.5 cents.
This means the Openpay share price has now lost two-thirds of its value in 2022.
Why is the Openpay share price sinking?
The Openpay share price is under pressure today after the company completed a placement of shares to sophisticated and institutional investors.
According to the release, Openpay has raised $18.25 million from the placement at an 18.6% discount of 24 cents per new share.
The release explains that Openpay received cornerstone support from existing and new shareholders to invest $16 million under the placement. Though, a portion of this will be subject to shareholder approval.
Management intends to use the capital raised to accelerate its pathway to profitability in the ANZ market. This is expected to be achieved by June 2023.
This will involve acquiring new merchants and customers at scale in the ANZ market, increasing customer retention, making platform and technology enhancements, and contributing to its growing receivables book.
Supporting the ‘engine room of the company’
Openpay’s ANZ CEO, Dion Appel, notes that this capital raising will support the company’s key driver of growth.
Openpay ANZ is accelerating its pathway to profitability through sustainable growth, market-leading margins and business simplification. Australia is currently the engine room of the Company and we remain focused on delivering this plan. We appreciate the strong and continued support shown by existing shareholders, and new investors for the Placement and are pleased to welcome eligible shareholders to participate in the SPP on the same terms as the Placement to further accelerate our strategy.
Openpay will now seek to raise a further $2 million via a share purchase plan. This will be undertaken at 24 cents per share, which is the same price as the placement.