MoneyGram, one of the largest payment providers, has announced the completion of its at-the-market equity selling program through which it had mopped up close to $100 million.
It was just a few days back that the company had announced plans to sell equity shares worth $100 million in the open market at the market price in a way that does not give undue advantage to anyone and in a way that it didn’t affect the normal working of the market. The funds collected from this selling program were planned to be utilized for paying off some of its outstanding debt.
Though the company had said that it did not intend to shake up the market through its selling program, it led to a large drop in the share prices on that day but the company still went ahead to complete the selling program.
The company said that it had sold off 10.4 million shares at an average price of $9.56 per share and due to this selling, it was able to collect $99.8 million. The company said that, as planned, the proceeds would go towards partially repaying the outstanding debt with Bank of America under the First Lien Credit Agreement and also the Second Lien Credit Agreement.
Though details of these agreements were not shared and no details were given about the total outstanding amount, the fact that the company has chosen to sell equity shares has been shaken up by the traders and the investors of the company. The company has been claiming to do well over the last few months as the digital payments systems all around the world have picked up pace during the pandemic and have been pushing for record trading and payment volumes during this period. The need to raise funds at this time and that too from the market has surprised many and this is probably one of the reasons for the fall in share prices over the last few weeks. The large-scale selling of the company shares by the company itself could have also been a reason for the prices to fall.
But the company has been open and transparent as far as the initiation and completion of the share sales are concerned and the company has not raised any red flags regarding its operations so far. It has been one of the oldest companies in the payment industry and for now, everything seems to be ok.
