Could this BNPL share be wiped from the ASX?

Things are not looking good for this BNPL share right now…

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The Openpay Group Ltd (ASX: OPY) share price isn't returning to the ASX boards as planned on Friday.

This morning, the embattled buy now pay later (BNPL) provider requested that its shares remain suspended.

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.

Image source: Getty Images

What's going on with this ASX BNPL share?

Unfortunately for its shareholders, there's a reasonable possibility that Openpay could never trade on the ASX again.

According to its suspension request, the non-payment of the company's utilisation notice by 31 January means that Openpay has breached the covenants of loan agreements with senior secured lenders.

Management has advised that constructive discussions are underway with its senior secured lenders, and a sub-committee of non-conflicted directors anticipate that negotiations will allow the company to make an announcement and end the suspension.

What's the issue?

Openpay ended the last quarter with a cash balance of approximately $17 million after burning through $18 million of cash during the three months.

Clearly, if it were to do the same in the current quarter, it would run out of money.

However, the company has unused finance facilities of $41 million, which would boost its total available funding to $58 million. This would give it 3.19 quarters of funding according to its cash flow report.

The issue is getting hold of these funds. No explanation has been provided, but it appears as though its financiers aren't overly keen to put this money up. Which is understandable given how far away Openpay seems to be from becoming profitable. If it ever will be.

All in all, it wouldn't be overly surprising if this ASX BNPL share follows the lead of Laybuy Group Holdings Limited (ASX: LBY) and delists from the Australian share market in the near future given the sad state it is in.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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