Special Report: The bidding process from a sophisticated investor consortium could see Reffind emerge with a 25 per cent stake in blockchain technology company Loyyal.

ASX-listed software company Reffind (ASX:RFN) is poised to benefit from investor optimism around the latest COVID-19 vaccine results.

Global markets are continuing to respond to positive vaccine results from pharma giant Pfizer overnight, as travel-linked stocks soar.

Leading the pack are shares in the major airlines, some of which have surged by as much as 50 per cent.

And the move bodes well for Reffind’s strategic stake in Loyyal – a blockchain-enabled loyalty and rewards platform headquartered in San Francisco.

Prior to the pandemic, Loyyal signed a three-year vendor deal with global airline Emirates to deploy its data management system following a successful pilot program.

And in late January, the company issued convertible SAFE (simple agreement for future equity) notes at an implied valuation of $US29m (~$40m).


Loyyal turnaround

Like many companies, Loyyal faced severe disruption from the COVID-19 pandemic.

But last week, Reffind provided a market update on its role as part of an investment consortium in connection with Loyyal’s Chapter 7 bankruptcy proceedings.

In its announcement, Reffind advised that the US Bankruptcy Trustee has confirmed that the consortium of sophisticated investors are the preferred bidders for Loyyal’s assets.

If the bid is successful, Sydney-based advisory firm Barclay Pearce has indicated that it will lead a $US1m (~$1.4m) funding round to recapitalise the business.

The funding round will be secured on an implied valuation for Loyyal of $US20m (~$28m).

Reffind has advised that it will not participate in the capital raising. However, the capitalisation process will leave it with a stake of 25 per cent in the reconstructed entity.

That’s good news for Reffind shareholders, for two reasons:

Firstly, the 25 per cent stake is a larger holding than RFN’s initial 15 per cent investment.

And secondly, it will leave the company with an investment that has an implied valuation of $US5m (~$7m).

On those numbers, the investment holding alone will be valued at more than twice that of RFN’s current market cap of around $2.5m.

In addition, the bidding consortium has already established an expert leadership team in anticipation of a successful bid.

The new executive suite will be led by CEO Philip Shelper, who has extensive career experience with Qantas Frequent Flyer and Vodafone. Shelper is also the CEO and founder of leading loyalty consulting agency, Loyalty & Reward Co.

In light of today’s news on vaccines, Reffind’s strategic investment in Loyyal could be set to reap lucrative dividends if successful vaccine treatments provide a catalyst for the reopening of global travel routes.

If the recapitalisation process is completed, the company will emerge with a 25 per cent stake in a global blockchain technology business which has already booked a partnership agreement with one of the world’s largest airlines.

It makes for an exciting few months ahead as the Consortium bidding process moves towards completion.


This article was developed in collaboration with Reffind, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.