CANCELLED: Prospa postpones its $146 million ASX-listing indefinitely

Brendon Thorne/Getty Images

  • Fintech lender Prospa has delayed its IPO indefinitely, after initially pulling its listing on Wednesday.
  • It follows questions raised by ASIC about whether it’s lending model for small businesses complied with industry regulations.
  • In a statement this morning, the company said it has been in consultation with ASIC, but didn’t give a timetable as to how long the listing will be delayed for.

Small-business lender Prospa has advised that its proposed float to list on the ASX has been postponed indefinitely.

Doubts emerged about whether the float would go ahead on Wednesday, after the company unexpectedly pulled its listing 15 minutes before it was scheduled to go ahead.

That followed reports that the corporate regulator ASIC was seeking confirmation from the company about whether its small business loans were compliant with industry regulations.

Given the increased attention around ASIC’s line of questioning, there were concerns it may have sparked a round of selling once the shares went live on the ASX.

Reports suggest that Prospa and its advisors may now wait until the end of the month, when a fintech industry new code of conduct for small business lending is scheduled to be completed.

In a statement this morning, Prospa confirmed that it received a letter from ASIC on Tuesday, and had been in consultation with the regulator since the float was pulled on Wednesday.

“Over the past 48 hours, Prospa has constructively engaged with ASIC to review its current loan terms and has provided detailed information in response to the regulator’s queries,” the statement said.

“Prospa is satisfied that the issues discussed with ASIC are not material to the IPO and no additional disclosure is required in the prospectus. ASIC has not raised further queries on the prospectus.”

The company didn’t give a timetable as to how long the delay will remain in place.

L-R: Matt Kean, NSW Minister of Innovation and Better Regulation, Greg Moshal and Beau Bertoli, joint CEOs of Prospa). Photo; supplied

Regarding the industry review, Prospa said it “understands that a similar review and consultation process is underway with the other major industry participants in the small business lending space”.

A spokesperson for the company told the AFR that Prospa will provide a briefing on the matters raised by ASIC, with the company now planning to list again at a later date.

The fintech startup, founded in 2012 by Greg Moshal and Beau Bertoli, makes loans of between $5,000 and $250,000 to small businesses.

The average loan size for a Prospa loan is around $26,000, and the company charges an average interest rate of around 40% on loans made.

It currently has around $200 million worth of loans on its books.

The higher interest rates are charged to account for an increased degree of risk, as the company maintains an impairment provision equivalent to 6-8% of its loan book. That compares to less than 1% for the big banks.

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