Kim Heng 5G2 has entered into a loan agreement with its executive chairman & CEO, Thomas Tan, where Tan will provide the company with a loan facility of $7 million.
Tan is also the company’s controlling shareholder with a 40.28% stake comprising direct and deemed interests.
The interest rate of the loan facility is at 8.5% per annum. Under the facility, the company may submit one or more drawdown notices to Tan on any business day before Sept 30. Any amount drawn from the facility will have to be repaid within two years from the disbursement date.
According to Kim Heng, it intends to use the loan for “funding suitable business opportunities and working capital needs of the [company]”.
The loan constitutes as an interested person transaction (IPT) under Singapore Exchange’s (SGX) listing rules as Tan is a director, CEO and controlling shareholder of the company.
Based on the listing rules, the value of the IPT is based on the interest payable on the borrowing. This means that the company’s IPT would amount to $636,000 assuming that the entire sum has been borrowed, or less than 1% of the company’s latest audited net tangible assets (NTA). As at Dec 31, 2022, Kim Heng’s NTA stood at $63.6 million.
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Shares in Kim Heng closed 0.1 cent lower or 1.12% down at 8.8 cents on Sept 18.
