31st Mar 2014 13:27
LONDON (Alliance News) - LED International Holdings Ltd said Monday that it had secured CNY100 million through a conditional placing and issue of convertible loan notes from a group of mainly private investors in Taiwan.
LED signed an agreement with Best Merchan Ventures Ltd, Legend Giant Ventures Ltd, Talent Plus Ventures Ltd and Y&C International Holdings Group Ltd. CNY 5 million was raised through the placing of shares with the group of investors at CNY2 per share.
The remaining CNY95.0 million was raised through the convertible loan notes. The proceeds of the loan will be used to provide necessary capital to LED's leasing finance company Green Pearl Leasing Co Ltd and general working capital.
It will also undergo restructuring to transfer the beneficial interest in Green Pearl Leasing to its new subsidiary Osmar Ltd.
In a separate statement Monday LED said that its 60% owned subsidiary Pearl Energy Conservation Holdings Ltd entered into an agreement with its Chief Executive Officer Steven Chan for the issue of convertible loan notes, and the settlement of its outstanding loan of USD1.28 million to him.
The principal of the loan notes is due December 31, 2015, and attracts 9% interest per year. Interest on the loan notes will be satisfied by the issue of shares in LED. The loan notes can be converted into Pearl Energy shares at a rate of USD2.589 per share; or the loan notes can be redeemed by requiring Pearl Energy to allot and issue shares in LED at HKD2.50 per share.
The price of HKD2.50 is a 14% premium to the closing middle market price of 17 pence last Friday, the company said.
Shares in LED were trading down 5.9% at 16.00 pence Monday afternoon.
The company had been struggling with financing; earlier in March the company said it still hadn't received funds from a recent subscription offer, and at that time was considering talks with another party about getting much needed funding.
The energy saving products company had announced a proposed capital raising at the end of December after its energy management contract business plan was delayed. At that time, it borrowed CNY6 million from Rubyfield Holdings Ltd and Speedy Dragon Holdings Ltd under a working capital loan, and said it would raise CNY25 million through a subscription with those companies. The placing and the loan proceeds combined total CNY31 million.
In February, the company had said that it was still trying to raise CNY31 million from the two investors in an attempt to secure its immediate future and fund its new lease financing unit.
Its new leasing unit, Green Pearl Leasing, will provide lease financing to customers. It has been awarded a leasing finance license, but LED International was required to contribute 20% of the subsidiary's CNY100 million registered capital within three months of the license being approved. It has to contribute the remaining money within two years of the approval.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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