ASX-listed buy now pay later provider Splitit Payments Ltd has placed one of its Australian subsidiaries in voluntary administration.
Splitit Australia Capital Pty Ltd was placed in voluntary administration on Tuesday night, with Deloitte partner Robert Woods appointed as liquidator.
Banking Day has been told by a spokesperson for the company that the winding up of Splitit Australia Capital Pty Ltd was part of an administrative cleanup of a dormant entity of the group and has no bearing on the financial position or operations of the parent Splitit Payments Ltd nor its other local subsidiary, Splitit Australia Pty Ltd.
Woods has commenced a process to settle all debts of the subsidiary after advertising on Wednesday for creditors to formally notify him of their claims against the company.
Any creditors have until 17 August to furnish proof of the debts they are owed to establish their priority to claims over the subsidiary's assets.
The winding up of the subsidiary will leave Splitit Ltd with one operating entity in the Australian market – Splitit Australia Pty Ltd.
Both of the Australian subsidiaries were incorporated in May 2019.
Like many BNPL companies, Splitit Payments Ltd has been developing a multi-faceted transnational operating and management model – while the company’s stockmarket listing is in Australia, its corporate headquarters are located in New York and its chief executive is based at the company’s Tel Aviv office.
Splitit’s financial performance deteriorated in 2021.
The group reported a net loss of US$39.6 million for the 12 months to the end of December, which brought the total accumulated losses reported on its balance sheet to US$102.3 million.
However, the company’s chief executive Nandan Sheth said in a quarterly update in July that he was encouraged by the company’s progress this year.
“Our differentiated business model that unlocks existing credit for merchant funded instalments is becoming the most viable alternative to the high friction and high risk legacy BNPL services,” he said.
“The industry is starting to recognize that Splitit’s unique model stands apart in a crowded space of players extending unsecured loans to subprime consumers.”
Since touching a 12 month-low of 10 cents in late June, the ASX-listed scrip of Splitit Payments Ltd has more than doubled in price as retail investors have poured back into buy now pay later and instalment payment stocks.
Splitit’s share price closed up 2.5 cents or 10.6 per cent to 26 cents on Wednesday.