Gateway to loan Healthway Medical Corp $10m
Unpaid doctors and drug suppliers of Healthway Medical Corp (HMC) should see some cash coming their way soon.
Private equity firm Gateway Partners is set to make a $10 million loan to the derelict clinic operator by tomorrow under new deal terms that bypass change of control concerns previously flagged by the Singapore Exchange.
Under the new terms, Gateway can convert the $10m convertible bond into shares amounting to 12 per cent of HMC's issued share capital, or 10.72 per cent of the enlarged share capital at any point over the next five years.
HMC gets net proceeds of $8.3m after upfront fees. The bond is a zero coupon bond, so it is redeemable at maturity at 100 per cent of the principal amount plus a redemption premium that gives Gateway an internal rate of return of 6 per cent.
Gateway gets the right to nominate just one non-executive director to the HMC board, instead of the more onerous control rights previously put forth.
HMC chairman Khoo Yee Hoe said the Gateway loan "best suits the company's needs in the circumstances".
HMC shares fell 0.1 cent or 2.27 per cent to 4.3 cents after the deal was announced.
Gateway wants to issue another tranche of $60m convertible bonds, which will require shareholders' approval. HMC plans to seek this approval at an extraordinary general meeting to be held by April 21.
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