MAJOR shareholders will support microlender Finbond’s proposed rights issue to fund an ambitious expansion into North America, although some analysts warn of "significant execution risk".The R525m rights issue announced last week represented nearly a quarter of the group’s market capitalisation on Friday. 36One analyst Nico Smuts said Finbond appeared to be putting all its weight behind its ambitious expansion into the US and Canada — where it plans to buy four payday lending companies — instead of carefully testing the waters.Finbond plans to generate between 70% and 80% in net earnings from these businesses within five years, which Mr Smuts says implies doubling its earnings in North America during the period."The excess funds raised during this rights issue will be used as working capital for this purpose," he said. "The acquisition … gives them access to two large new markets with attractive characteristics, but comes with significant execution risk due to Finbond’s lack of expe...

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