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WASTE management company Metech International said on Tuesday it plans to issue S$2 million worth of non-convertible high-yield bonds through a crowdfunding platform.
The two-year bond will pay a coupon rate of 8 per cent per annum, though to be clear half of the principal is due in 12 months. The company also has the option to repay the full sum in 12 months without incurring any penalty.
Interest of 12 per cent will be imposed on late payment, and will apply to the coupon rate as well as the principal sum.
Simon Eng, as the largest shareholder of the company, will pledge his equity stake for this bond as security.
The full amount of S$2 million will be used to fund Metech's supply chain management business.
"The company is of the opinion that the bond issue presents the best way to raise capital for the company," it said in a regulatory filing.
"Based on current market conditions, the company is not confident that it will be able to get loans from traditional lenders such as banks and finance companies. The company is also not confident that it can raise capital from the security market, given its current share price and the depressed stock market."
One such platform that offers short-term bonds is FundedHere. The platform charges an administration fee of 1.5 per cent per annum of the loan amount.