FNX Proposed Stayco Acquisition and Capital Raising

Finexia Financial Group Limited (ASX: FNX) (Company) advises that it intends to reconstruct its issued equity capital through the consolidation of the current shares on issue on a 1:5 basis. In conjunction with this reconstruction of capital, the Company wishes to advise that it will undertake a placement of up to 23,037,980 fully paid ordinary shares (on a pre-consolidated basis) to sophisticated and professional investors to raise up to A$1,151,899 (Placement) as well as undertake a pro rata non-renounceable rights issue to existing shareholders to raise A$4,863,213 (Rights Issue).

Furthermore, the Company intends to raise a further A$10m through the issuance of a redeemable convertible notes to sophisticated and wholesale investors (Convertible Notes Issue).

Hereafter, the Placement, the Rights Issue and the Convertible Notes Issue are together referred to as the Capital Raising.

Use of Funds

The combined proceeds of the proposed Capital Raising will be utilised for the following key strategic priorities:

• The Company is proposing to acquire that part of the Finexia Direct Accommodation Income Fund (Stayco) which it does not already have an investment in, from the existing Stayco investors, being the current 19 unitholders in Stayco (the Stayco Investors). The Company confirms that none of the Stayco Investors are related parties, key management personnel, substantial holders, advisors or associates of the Company. Subject to the completion of this acquisition the Company does not intend to make any further acquisitions into the Finexia Direct Accommodation Income Fund and intends to focus on its other funds.
• Stayco, the domestic tourism accommodation Fund will become one of the Company’s strategic proprietary investments. The open-ended fund was established in September 2021 to take advantage of an opportunity to invest in a high-quality portfolio of holiday and long-term accommodation businesses. The properties currently within the portfolio are primarily located in the hugely popular coastal Southeast Queensland region. The strategic blend of accommodations (holiday letting and long-term tenancies) has afforded the fund the ability to diversify the income sufficiently to ensure the overall performance is not entirely hinged on one segment of the accommodation market.
• Of the 13,824,610 units on issue in Stayco, the Company currently owns 6,334,310 units. Under the proposed acquisition, the Company is proposing to acquire the balance of the existing units within Stayco (being 7,490,300 units), and therefore assume full ownership. Further details regarding Stayco are set out in the Company’s announcement dated 24 December 2021 titled ‘Finexia Funds Management Achieves Milestone.’
• The Company is also proposing to acquire a portfolio of complementary holiday accommodation assets from Mr Paul Picone and intends to integrate these assets into a new wholesale fund of which Finexia will be the sole unitholder, becoming part of the existing Stayco brand and business.

To read the Proposed Stayco Acquisition and Capital Raise click here.