Zip Co Ltd (ASX:Z1P), a company active in the digital retail finance and payments industry, today announces that it has received firm commitments to raise $120 million before costs via a placement of 22,471,911 ordinary shares.

The oversubscribed placement was completed with the support of new and existing institutional investors and fully underwritten by Merrill Lynch Equities (Australia) Limited with Shaw and Partners acting as Co-Lead Manager. The issue price for the Placement Shares was $5.34 per share representing a 4.1% discount to the last traded price of Zip’s shares on the ASX on 16 December 2020.

The Placement Shares are expected to be allotted and issued on Tuesday, 22 December 2020 and will rank equally with Zip’s existing ordinary shares on issue. The Placement Shares will represent approximately 4.3% of the issued capital of Zip before the Placement.

Larry Diamond, Managing Director and CEO of Zip, said:

“The additional growth capital will enable Zip to capitalise on the successful acquisition of QuadPay in the US, scale Zip’s operations in the UK, lead the active pursuit of global growth opportunities and support the launch of Zip Business.”

Following completion of the Placement, Zip’s eligible shareholders will be given the opportunity to subscribe for new shares under a Share Purchase Plan at a price per share equal to the lower of the price under the Placement of $5.34 and a 2% discount to the 5-day VWAP of Zip’s shares up to and including the date the Share Purchase Plan is scheduled to close (expected to be 13 January 2021).

Under the terms of the Share Purchase Plan, shareholders registered at 7.00pm (Sydney time) on Tuesday, 15 December 2020 will be entitled to subscribe for up to $30,000 of Zip shares to raise up to $30 million (subject to Zip’s discretion to increase this cap and accept oversubscriptions and/or scaleback applications).

Further details of the Share Purchase Plan will be provided to shareholders in due course.