China Rapid Finance Scores $8 Million Funding; Stock Soars After-hours
The financing company landed a large deal for Christmas this year and sold off a stake of about 37% to True North Financial.
Shares in China Rapid Finance Ltd. (NYSE: XRF) soared 15% in after-hours trading on Christmas Eve on news that the company has lured a large stockholder and scored an investment of $8 million.
The funds, provided by True North Financial LLC, are in the form of a promissory note and are payable on Jan. 13, XRF said in a late afternoon statement on Tuesday.
True North has acquired approximately 38 million Class A unregistered ordinary shares and 3.5 million Class B shares in XRF at $1.93 per ADS, or 19 cents per ordinary share, according to the announcement. The investment gives True North 36.63% of the total voting power in XRF.
XRF also said its new patron may appoint two directors to its board.
"We are excited about True North Financial's commitment to China Rapid Finance as it continues its transition into the new business model," XRF concluded.
China Rapid Finance has been restructuring its business to stay afloat in China's bleeding lending sector. Previously a peer-to-peer lending marketplace, it was forced to transition after a regulators' crackdown that led to thousands of company closures.
Last week, XRF announced that one of its entities is now licensed to operate microcredit operations.
The stock in China Rapid closed down 7 cents on Tuesday, at $1.83 per American depositary share. In after-hours trading, following news of fresh capital, XRF shares jumped 27 cents to $2.10 per ADS.
