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DeClout pledges shares in Procurri unit for S$10m loan from private lenders
TECHNOLOGY firm DeClout Ltd has taken a S$10 million loan that is pledged against its full stake in its mainboard-listed unit Procurri, it said on Wednesday.
The loss-making firm said it has taken up a two-year loan from a group of six private investors. The loan bears an interest rate of 8 per cent per annum.
The loan is secured against DeClout's entire share interest in Procurri. This stands at 46.8 per cent, or some 132 million shares of Procurri, which makes data centre IT equipment. The loan is also secured against corporate guarantees by two other subsidiaries of DeClout.
The lenders were introduced to DeClout by Xander Capital, which will get one per cent of S$10 million once the loan has been drawn down. The individuals were not named.
DeClout, which is listed on Catalist, said this financing would be used for business expansion of Beaqon Pte Ltd and vCargo Cloud Pte Ltd. The two units are the subsidiaries standing as corporate guarantees for the loan.
The lenders have the right to have the loan repaid ahead of time if, among other things, DeClout's shareholding interest in Procurri falls below 44 per cent, or if the pledged value of Procurri shares falls below S$19 million.
Shares of Procurri closed unchanged at S$0.215 on Wednesday, valuing DeClout's stake in Procurri at about S$28 million.
The lenders also hold the right to have the loan repaid ahead of time if Wong Kok Khun is no longer the CEO of the group.
DeClout and Mr Wong are facing a lawsuit involving a former subsidiary's shares after the Singapore High Court agreed to reinstate the plaintiff's claims. DeClout has called those claims "baseless and unmeritorious".
DeClout posted a net loss of S$16.4 million in 2017.