Lending platform Kredivo cancels $2.5 billion SPAC deal

Adds agreement termination details, SPAC background

March 14 (Reuters)VPC Impact Acquisition Holdings II VPCB.O the company said Monday and FinAccel, the parent company of buy now, pay later Kredivo platform, have each other agreed to terminate their $2.5 billion blank check deal due to unfavorable market conditions.

The announcement comes at a time when US market volatility has peaked, triggered primarily by geopolitical tensions and fears of rising rates.

“Adverse public market conditions and process delays beyond our control and those of Kredivo affected our transaction timeline and made it impossible to close the transaction,” said Gordon Watson, Co-Chief Executive Officer of the company. VPC Impact special purpose acquisition.

Pursuant to the terms of the Termination Agreement, Victory Park Capital (VPC) is leading a $145 million structured private investment in Kredivo.

The deal, first announced in August, was to fund Indonesia-based Kredivo’s international expansion in a bid to capitalize on the growing popularity and pandemic-driven boom of the buy now, pay later sector. .

SPACs, which offer an alternative route to listing stocks, have grown in popularity in 2020. But the sector has taken a hit, with several companies dropping deals, higher investor buyouts and tighter regulatory scrutiny since the start. ‘last year.

Last week, corporate transportation company Gett also scrapped its $1 billion blank check deal, citing market conditions.

SPACs are companies that are listed on the stock exchange but do not carry out any commercial activity. They use the pool of capital raised through an initial public offering to merge with a private company, in a deal that then takes it public.

(Reporting by Manya Saini in Bengaluru; Editing by Maju Samuel)

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