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Kitchen Culture to crowdfund S$2m bond issue
LOSS-MAKING Kitchen Culture Holdings, which sells kitchen systems, on Thursday said it intends to seek crowdfunding for a S$2 million non-convertible bond issue that will pay a coupon of 9 per cent per annum.
Terms of the 24-month debt are such that 50 per cent of the principal is due for repayment in 12 months. The rest will be paid off in the second year.
In the case of late payment, interest will increase to 12 per cent per annum for the period payments are behind schedule, calculated on a daily basis.
The unidentified crowdfunding platform will offer it to investors, and will earn an administration fee of 2.25 per cent of the loan amount. The platform is licensed by the Monetary Authority of Singapore.
CEO of Kitchen Culture Lim Wee Li will have to pledge 50 million shares - or 50 per cent equity stake in the company - to an appointed bond trustee.
Mr Lim already has an equity stake of 4.4 per cent in the company pledged to Sing Investments & Finance (Pte) Limited.
In July this year, its independent auditor KPMG said that there are material uncertainties surrounding the financial health of the company that would allow it to continue its ordinary operations. Kitchen Culture posted a net loss of S$6 million and an operating cash outflow of S$1.7 million for the year ended Dec 31, 2015.
As at Dec 31, the group had breached a loan covenant for a bank and triggered cross default on other banking facilities. It has since fully repaid the bank and terminated that facility on June 30 this year. Credit facilities from other banks continue to be available to the group, and a director has provided short-term advances amounting to S$3 million for short-term working capital.