Indonesia-listed tech major GoTo has terminated its plan to raise funds through a $500 million convertible bond issue, Bloomberg reported on Wednesday citing multiple sources. The sources said GoTo had concerns that the debt sale would send a conflicting message to investors.
Bloomberg reported that GoTo shelved the plan after discussions with BlackRock Inc., private equity firm PAG, and the World Bank’s International Finance Corp. Its initial plan was to raise $1 billion from the bond sale, which was later downsized.
When contacted by DealStreetAsia, a GoTo spokesperson said the group “does not comment on rumour and speculation”.
“We have made considerable progress towards profitability, revising our guidance to turn adjusted EBITDA positive by Q4 2023, having delivered strong results over the course of 2022,” the spokesperson added. “With 29 trillion rupiah of cash on hand as of end-2022, we have a sufficiently healthy balance sheet to carry us to positive operating cashflow, without any need for additional external funding.”
DealStreetAsia had reported in October that a convertible bond issue was among the options being pursued by GoTo to shore up capital, besides a private placement of shares and an IPO in the US.
GoTo, on several occasions, has also expressed its intent to divest non-core assets to extend its runway.
Despite reporting wider losses last year due to goodwill impairment, GoTo managed to significantly increase its revenues during the period. GoTo targets to be profitable in terms of adjusted EBITDA and group contribution margin by Q4 2023 and Q1 2023 respectively, on the back of cost management and revenue optimisation efforts.
Jeffries’ Thomas Chong, Melody Chan, and Zoey Zong were positive on GoTo’s adjusted EBITDA target in their recent note.
“GoTo expects cash burn to be reduced by about 65% this year and positive cash flow is expected in early 2024. It has sufficient cash to execute its business plan. In H1 2023, it is focusing on profitability and will not expand into other international markets aggressively. Product-led, instead of incentive-led model, is pursued with emphasis on hyperlocal strategies,” the note reads.
GoTo’s shares were up 3.26% on Tuesday and closed at 95 rupiah apiece. Wednesday was a trading holiday for the IDX on account of Eid al-Adha. GoTo will announce its first quarter 2023 results on April 27.