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Healthway agrees to some changes to Gateway's convertible bonds deal (Amended)

Thursday, March 23, 2017 - 08:44

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Healthway Medical Corp has agreed to certain amendments to its convertible bonds deal with Gateway Partners due to overall lower cost of funding and speed of disbursement of funds to address the company's immediate liquidity needs.

HEALTHWAY Medical Corp has agreed to certain amendments to its convertible bonds deal with Gateway Partners due to overall lower cost of funding and speed of disbursement of funds to address the company's immediate liquidity needs. The company has also requested for trading halt to be lifted.

The proposed amendments will involve a change of investment structure.

Now, the whole S$70 million will be fully-convertible notes and will be issued in two tranches of S$10 million and S$60 million. Both tranches carry no coupon and will mature in five years from the date the first tranche is issued.

The notes are also redeemable at maturity at 100 per cent of the principal amount, plus a redemption premium where the noteholder will achieve an internal rate of return of 6 per cent.

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There will be no change of control redemption provisions for the notes.

However, the disbursement of the S$10 million is pending in-principle approval from SGX for the listing and quotation of the conversion shares to be issued upon the conversion of the first tranche. SGX has said that the first tranche may be issued without shareholders' approval. 

SGX has been concerned that the original deal would constitute a change of control and had stepped in to require the company to seek shareholders' approval for the issuance of these notes.

Amendment note: An earlier version of this article incorrectly stated that the disbursement of the S$10 million is pending approval from SGX that it may be issued without shareholders' approval. SGX has said that the first tranche may be issued without shareholders' approval. It is in fact pending in-principle approval from SGX for the listing and quotation of the conversion shares to be issued upon the conversion of the first tranche. The article above has been revised to reflect this.

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