The Openpay Group Ltd (ASX: OPY) share price has been a strong performer on Thursday morning.
At the time of writing, the buy now pay later (BNPL) provider’s shares are up 13% to $1.44.
Why is the Openpay share price pushing higher?
Investors have been bidding the Openpay share price higher today following the release of an update on its US operations.
According to the release, the company has entered into a US$271.4 million asset-backed revolving debt facility with Goldman Sachs and mezzanine financing provided by Atalaya Capital Management.
The release notes that this warehouse facility will enable Openpay to fuel its expansion into the enormous US market. Management believes it represents a key milestone for the company as it looks to facilitate transactions for merchants and consumers in the country.
As part of the deal, Openpay will issue 1,022,271 warrants to Goldman Sachs. Each warrant is exercisable into one fully paid ordinary Openpay share at a subscription price of ~$1.30 per warrant. This represents the 30-day volume weighted average price on 5 October.
Openpay’s US CEO and Global Chief Strategy Officer, Brian Shniderman, was delighted with the news.
He commented: “We are thrilled to work with Goldman Sachs and Atalaya who will now deliver the funding to enable our growth in the US at scale. We will begin distributing BNPL in large volumes through major ecosystem partnerships like payments processors, and merchant aggregators requiring significant funding.”
“This is precisely what we shared as our plan with investors, and all part of our six Pillar Strategy. This facility is now set to grow our US business at a greater scale for the global company through this exciting US launch going live this month.”
This sentiment was echoed by Openpay’s US CFO, Efrat Yellin.
He added: “We are excited and honored for Goldman Sachs and Atalaya to serve as our foundational funding financial institutions. Working with these funders complements our solid balance sheet setting us up for our US launch. This facility will allow us to scale quickly and provide US consumers with funding for their various needs.”
Despite today’s decent gain, the Openpay share price is down a disappointing 40% since the start of the year.
Shareholders will no doubt be hoping this news is an inflection point for the Openpay share price.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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