Updated
Prospa was marketed as the "biggest float of the year", but its public listing on the ASX has been delayed again — this time, indefinitely.
The online small business lender — or "fintech" as it likes to be called — was supposed to begin trading on Wednesday, but shelved its float with just 15 minutes to spare.
Its plan was to delay the listing by just 48 hours.
But Prospa has today confirmed, in a statement, that its listing has been "postponed", without indicating how much longer the delay will be.
On Wednesday, it claimed the reason for the initial delay was so it could respond to some 11th-hour queries from the Australian Securities and Investments Commission (ASIC).
Prospa said the regulator's questions were about Prospa's "small business loan terms", given the "industry-wide review into financial services small business loan term".
However, ASIC's spokesperson denied the regulator was the cause of the hold-up and that it was Prospa's "voluntary" decision.
"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," the company said in today's statement.
"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."
Fintechs under scrutiny
The online lending industry has come under particularly close scrutiny following revelations in Prospa's prospectus, which detailed an average interest rate of 41 per cent.
ASIC and the Small Business Ombudsman have raised questions about potential "unfair contract terms" with Prospa and other online lenders since new laws were introduced in November 2016.
The laws extend protection to small businesses from unfair terms contained in standard form contracts.
In its prospectus, issued last month, Prospa disclosed that it had reviewed its loan contracts twice in regards to unfair contract terms — in July 2015 and September 2017.
"We will continue to review our loan contract as and when required in light of relevant case law and regulatory guides that may be issued," the company wrote.
But earlier this week, ombudsman Kate Carnell told The Business:
"I do not think anyone can say their contracts at this stage comply with the legislation.
"There are a couple of issues we raised with them inside their contracts we think should be addressed."
"We are working with the whole fintech industry on a code of practice to allow small businesses to have the information they need to compare different products.
"I think … Prospa and fintech[s] should have a good look at the royal commission and the banks to see what would happen if you are not transparent and have good information on the public record."
Topics: business-economics-and-finance, company-news, small-business, internet-technology, australia
First posted