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Design Studio takes 20m dirham unsecured loan from controlling shareholder
MAINBOARD-LISTED Design Studio Group is taking an unsecured loan of up to 20 million dirham (S$7.4 million) from controlling shareholder Depa United Group.
In connection with the loan, Design Studio is required to approve a business plan and restructuring strategy. This includes the appointment of a chief restructuring officer and the transfer of the group’s executive leadership to a Depa nominee or a candidate sourced by the Dubai-listed group.
The interest rate on the loan is at three-month Eibor (Emirates interbank offered rate) plus 5.5 per cent per annum.
Design Studio will use the loan for working capital requirements to support ongoing operations.
The group said its board and audit committee are of the view the loan was on normal commercial terms, that it is in the best interests of Design Studio, and is not prejudicial to the company's interest and that of minority shareholders. The loan will also improve the cash flow situation of the group, it added.
The parties entered into the loan agreement on Nov 29, the group said on Wednesday night in a regulatory filing.
Design Studio shares closed 7.1 per cent or 0.5 Singapore cent higher to 7.5 cents on Wednesday.