Butn Limited (ASX: BTN), an Australian Business-to-Business (B2B) funder, has announced the sale of its non-core Smash Repair Factoring Business for $4.1 million, alongside an agreement to amend and extend its corporate debt facility. Butn innovates how small to medium-sized enterprises fund and grow their businesses, focusing on transactional funding that leverages the end debtor’s credit. This strategic move aims to simplify the company’s operating model, sharpen its focus on core priorities, and reduce its overall cost base.
The binding sale agreement, executed with Working Capital Finance Pty Ltd (WCF), sees Butn divest its “Panel Business” – which comprises smash repair factoring operations. The transaction value of $4.1 million is approximately 2.5 times the business’s gross revenue. Consideration includes $2.0 million received at completion on June 30, 2026, approximately $2.0 million in deferred consideration, and a $100,000 deposit already received. The Panel Business was considered non-core, contributing less than 15% of FY25 gross revenue at lower margins and representing under 5% of FY25 Group Assets. Importantly, Butn will continue to generate secured interest income by providing WCF with a secured funding facility for eligible receivables post-completion.
In tandem with the divestment, Butn has amended its Mighty Partners Corporate Credit Facility. The company has agreed to a phased repayment schedule and an extension of the maturity date to August 31, 2026, or later by mutual agreement. Proceeds from the Panel Business sale and available cash resources are expected to fund these repayments. The company anticipates that the phased debt repayment and the sale of the Smash Repair business will reset its cost base by over $1.5 million, leading to materially reduced corporate debt and lower financing costs. This combined effort is projected to significantly contribute to Butn’s path towards sustainable profitability.
