UPDATE 3-Cash America to list online lending unit Enova

Thu Sep 15, 2011 10:59am EDT

* Cash America to retain at least 35 pct stake after IPO

* Enova to use proceed to repay $353.2 mln in debt to Cash America

* Enova plans to list on NYSE under symbol "ENVA"

* Cash America shares touch year-high (Adds details on earnings, updates share movement)

Sept 15 (Reuters) - Cash America International Inc said it will spin off its online lending arm Enova International in a $500 million initial public offering of Enova's stock, sending the pawn and payday lender's shares up to a new year-high.

The move will help Cash America focus on growing its store-front pawn operations in the United States and Latin America, while Enova will focus on providing short-term consumer loans online.

Both Cash America and Enova will sell shares in the offering, with Cash America retaining a 35-49 percent stake in Enova after the IPO, the company said.

Enova will use the proceeds of the offering to repay about $353.2 million in existing intercompany debt to Cash America, and does not expect that any additional proceeds will be available for its use.

The move also helps Cash America split its less regulated and fast growing pawn lending business from the booming consumer loan business, which -- though highly profitable -- is the subject of multiple state and federal rules.

Enova, which has operations in the United States, Canada, the United Kingdom and Australia, is seeing increasing regulatory pressure in its international markets that could hurt its business.

Australia is considering limiting the interest rates charged on consumer loans, prohibiting loan extension and refinancing. The United Kingdom is also looking into the possibility of capping charges on credit, hurting income from the loans.

In 2010, Enova earned about $25 million, while Cash America, as a whole, earned $115.2 million during the period.

Enova plans to list on the New York Stock Exchange under the symbol "ENVA."

In a filing with the U.S. Securities and Exchange Commission, Enova said UBS Investment Bank, Barclays Capital and Jefferies & Company Inc would be spearheading the underwriting the offering.

Shares of Cash America rose 7 percent to touch a year-high of $60.64, before shedding some gains to trade up 4 percent at $58.83 in morning trade on the New York Stock Exchange. (Reporting by Jochelle Mendonca in Bangalore; Editing by Joyjeet Das)

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