If you have a loan portfolio of $2 bil and you only get 94.5% repaid, $110 mil is lost. If you had put up $200 mil security at the start, the lender will skive off $110 mil, you will be left with $90 mil and you will need to replenish that $110 mil to get through the next cycle.
ZIP debt decreased sharply as ZIP reined in all kinds of out of control parts of the empire, sold and wound up businesses - recall Middle Eastern, European BNPL, ZIP Business in OZ and NZ - Pocketbook, The Urge, the list is long and it cost plenty to do it because in most cases much of the debt was left behind. ZIP published its financials at that time with directors signing the accounts noting a 'material uncertainty' as to whether ZIP would continue trading. That was a step away from the noose and lenders upped their security requirements and interest rates simultaneously to reflect the business and industry in general.
ZIP Price at posting:
$2.94 Sentiment: None Disclosure: Not Held
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