(Updates with further details)
March 30 (Reuters) - Buy now, pay later (BNPL) firm Zip Co Ltd (ZIP) said on Thursday it has signed agreements to divest its businesses in Central and Eastern Europe and South Africa, and is on track to shut down its operations in the Middle East.
With this, Zip aims to focus on its core businesses in Australia, New Zealand and the U.S., which would help reduce its cash burn from operations in the rest of the world by end-2023, the company said in a statement.
Australia's No. 2 BNPL company expects the divestitures to yield a net cash inflow of A$20 million ($13.36 million) during the second half of 2023.
BNPL operators have been under regulatory scrutiny after a proposal to regulate the sector with the same law that covers credit card and mortgage providers.
The sector has also seen its valuations collapse as reduced customer spending and rising interest rates have squeezed margins and pushed funding costs higher for companies.
($1 = 1.4966 Australian dollars)
News: ZIP UPDATE 1-Australia's Zip Co to divest businesses in Europe, South Africa
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