Capital World takes out S$5.5m convertible loan

PROPERTY firm Capital World has inked a S$5.5 million convertible loan agreement with two individual investors, it said in a bourse filing on Thursday night.

The Catalist-listed firm took the loan to repay an outstanding convertible bonds subscription agreement. After deducting expenses, it will have net proceeds of about S$5.1 million.

The loan - from Chong Thim Pheng and Ong King Sin - is for a period of a year with an annual 15 per cent interest rate.

It is convertible into new Capital World shares representing 16.52 per cent of the enlarged share capital, with a conversion price of S$0.0151708.

The conversion price is adjustable if there is consolidation, subdivision or conversion of shares; any issue of shares credited as fully paid-up to shareholders; or an offer by the company to its shareholders to subscribe to shares by way of right.

Mr Chong loaned S$4.5 million while Mr Ong loaned S$1 million, and they can convert their loan during the loan period into shares in multiples of S$1 million.

The company was introduced to the investors through Ong Kok Heng, sole owner of Malaysian business consultancy Prosper Network Co Ltd.

Mr Ong is Mr Chong's son-in-law, and as arranger he will receive a facility fee of 7 per cent of the convertible loan amount, which is up to S$385,000.

Both men are directors of Hotel Re! Pte Ltd and Hartawan Property Management Pte Ltd, companies in the business of hotels with restaurants and real estate activities.

The loan will be disbursed three business days after certain conditions for the loan are fulfilled. Any failure to repay the loan by its due date will result in a 17 per cent interest rate on the overdue amount.

Capital World shares closed up S$0.001 or 6.7 per cent to S$0.016 on Thursday.