Non-bank lender Plenti Group Ltd (ASX: PLT) shares are edging higher today after the company announced it has secured a new $100 million warehouse loan facility. At the time of writing, the Plenti share price has inched 0.97% higher to $1.04.
The new facility will allow the company to make further inroads into renewable energy lending and personal loans.
What’s driving the Plenti share price?
The Plenti share price is responding favourably to news that the company’s new $100 million facility will support the rapid growth of its loan portfolio.
The company expects the majority of new renewable energy and personal loan originations to be funded by the new facility, while its marketplace platforms continue to provide important sources of capital and funding diversification.
As the company’s loan portfolio scales, the facility is expected to be upsized, subject to funder approval.
Plenti says the facility has an 18-month availability period, and has a funding cost of approximately 3.0% per annum on a fully drawn basis. This is significantly lower than the company’s existing funding sources for renewable energy and personal loans.
Without naming the institutions, Plenti advised that senior funding was provided by a major domestic bank, with mezzanine funding coming from two new domestic investors.
The company also announced it has upsized its existing automotive loan warehouse facility from $150 million to $275 million.
Commenting on the new warehouse facility, Plenti CEO and founder Daniel Foggo said:
This facility marks another important milestone for Plenti. As well as adding further impetus to our exceptional growth, it makes our business more resilient by materially improving the economics on new loans, while further diversifying our funding sources.
About the Plenti share price
Plenti first listed on the ASX on 23 September 2020 at an offer price of $1.66.
On its ASX debut, the Plenti share price had a shocker, closing the day at $1.30 and down 21% from its listing price.
In November, the company delivered healthy first-half results, beating forecasts on its prospectus on all key financial metrics. Plenti reported revenue of $26 million, representing growth of 41% on the prior corresponding period, and 2% ahead of prospectus forecast, driven by strong loan portfolio growth.
It also achieved record loan originations of $167 million for the half, 33% above the first half of FY20 and 7% ahead of its prospectus forecast.
However, that didn’t stop investors from offloading Plenti shares. After rising to $1.30 in November, the Plenti share price has plummeted again to the current levels, which are its lowest levels to date.
Plenti commands a market capitalisation of $174 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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