Online small business lender Prospa has released a statement after an ASIC investigation caused it to postpone trading on the Australian Stock Exchange (ASX), saying it is satisfied the issues are not material to the IPO.
The company was due to commence trading on Wednesday (6 June) but held back after the Australian Securities and Investment Committee (ASIC) requested information on some of its loans as part of an ongoing investigation.
The fintech firm received a letter from ASIC on Tuesday 5 June as part of a broader industry review of small business lending contract terms.
It was originally paused for 48 hours while they communicated with the watchdog, but after a consultation with joint lead managers UBS and Macquarie has been postponed further.
In a statement from the group, it said, "Prospa understands that a similar review and consultation process is underway with the other major industry participants in the small business lending space. In response to this letter, the decision was made to pause the listing on Wednesday morning, 6 June 2018 to allow time to engage with ASIC and other stakeholders.
"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.
"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 continues to perform strongly and May 2018’s originations were 23% ahead of the prospectus forecast.
"The company has the complete support of its Board and existing shareholders.
"Major shareholders, including Entrée Capital, Square Peg Capital, and AirTree Venture Capital committed over $47m to the IPO (equivalent to almost half of the new funds coming into the company) and continue to be fully supportive of the company."