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Capital World extends deadline for private investors to complete due diligence

PROPERTY firm Capital World has extended the deadline for two private investors to complete due diligence on the company by slightly more than a month to Oct 20, the Catalist-listed firm announced in an exchange filing late on Monday night. 

Capital World, which has struggled to repay loans, said in July it was looking to raise some S$18 million by issuing about 916 million new ordinary shares to two investors, Yuan Zhiwei and Chng Chor Tong, at two Singapore cents per share. The issue price represents a 13.04 per cent discount to the volume-weighted average price of 2.3 Singapore cents, based on trades done on July 5.

Capital World shares closed at 1.5 Singapore cents on Monday, down 6.3 per cent, or 0.1 cent. 

According to the company's previous announcements, the due diligence should have been completed two months from the date of the term sheet entered into by the subscribers, that is Sept 9. 

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Capital World's board on Monday noted that the subscribers would require more time to complete the due diligence, and that both the company and the subscribers have "mutually agreed" to extend the date of completion of this due diligence. 

There is no change to other principal conditions of the term sheet, Capital World said.

One of the investors, Mr Yuan, is a Singapore Permanent Resident and a director and shareholder of Shen Zhen South Honki Investment and Guizhou Honki Real Estate Development, which deal in property development and investment. 

Mr Chng is a Singaporean investor and a director of Zhuang Sheng Singapore Holdings. He does fundraising and corporate consultancy.

The proposed subscription, if approved by shareholders, will see Mr Yuan take a 28.11 per cent stake in the company's enlarged share capital, making him a controlling shareholder. 

Mr Chng, on the other hand, will hold 4.84 per cent of the company's enlarged share capital. 

The company previously said that proceeds from this subscription will be directed mainly towards its Capital City Project in Johor, and partial repayment of its existing loans and borrowings, with the remainder for working capital purposes.