NAGA Group plans to raise $8.2M in a convertible bond offering

NAGA Group posted a 36% decline in revenues for the first quarter of this year. The company has now revealed plans to raise $8.2 million through a convertible bond offering. This offering will not include statutory subscription rights for the company’s shareholders at the Frankfurt Stock Exchange.

NAGA to raise $8.2M in a convertible bond offering

NAGA Group is a fintech company based in Germany, and it operates the neo-brokerage platform known as NAGA. The company is also behind the NAGA Pay neo-banking app and the cryptocurrency platform known as NAGAX.

The company announced plans to raise additional capital in a statement shared on Sunday. In the statement, NAGA Group said that the decision was made by the Management Board at the company, adding that it was subject to approval by the Supervisory Board.

The company has also shared additional details about this new offering saying that the convertible bond would be provided with a coupon of 11% and would have a maturity of six months. The bond will run between April 28 and October 30, 2023, and the conversion peg has been set at $1.97.

The company said that the conversion would be made at any term during the term. After the full conversion, the share capital will increase from EUR 4,162,436, equivalent to around 7.7% of the current share capital. NAGA also said that it obtained a subscription commitment from a leading investor.

The new funding plans that NAGA has made come three months after the fintech firm based in Hamburg said it was looking into a possible merger with a brokerage platform with a presence across many countries.

The founder and CEO of NAGA Group, Benjamin Bilski, also said that NAGA was exploring new opportunities to strengthen its capital base. Bilski noted that the company had suffered significant losses last year, necessitating growing the capital base.

NAGA reports a drop in revenues

NAGA reported significant profits from the beginning of 2023 until early February. However, by the end of Q1 2023, the company’s revenues had declined by 36% year-over-year to EUR 11.6 million. During the first quarter, the company also generated around EUR 37 billion in total trades.

In Q1 2023, the earnings reported by NAGA before interest, taxes, depreciation, and amortization (EBITDA) declined by nearly 200% annually from EUR 5 million in the first quarter of 2022 to EUR 1.7 million. The plunge in revenues in Q1 2023 compared to the same period last year happened despite a 30% increase in the active traders on the platform.

NAGA Group has also yet to share its financial results for the 2022 financial year. However, the numbers from the company’s website show that NAGA generated estimated revenues of 52 million euros in the previous fiscal year. The revenues reported by the company also declined by 6% year-over-year from the 55.3 million euros reported in 2021.