This article first appeared in The Edge Financial Daily on May 22, 2018

KUALA LUMPUR: Aspen Group Holdings Ltd is planning to raise RM44 million via a convertible loan agreement to finance its investments in associate company Global Vision Logistics Sdn Bhd in Shah Alam, the construction of the central park located in Aspen Vision City, investment in associate company Bandar Cassia Properties (SC) Sdn Bhd, its other development projects and for working capital.

Aspen said it has inked an agreement with Haitong International Financial Products (Singapore) Pte Ltd, a wholly-owned unit of Haitong International Securities Group (Singapore) Pte Ltd, to raise the money.

“The loan is consistent with the group’s earlier stated intention to explore various fundraising opportunities and options to finance strategic plans that will benefit the group,” Aspen president and group chief executive officer Datuk M Murly said in a media statement.

Aspen said the loan period will span over 18 months, calculated from the date of disbursement. The loan comes at an annual interest of 6.5%, and payable every six months.

At any time during the loan tenure, Aspen said Haitong is accorded with the right to convert up to 50% of the disbursed loan in one or multiple tranches, into new shares at a fixed conversion price of 35 Singapore cents or RM1.03 per share.

Aspen said the conversion represented a premium of 59.1% above the volume weighted average price of its shares of 22 Singapore cents or 65 sen, as at May 18.

“The loan and the conversion premium of 59.1% also underscore the confidence Haitong has in Aspen Group’s current projects and future pipeline which will enhance shareholder value,” Murly added.

Aspen said the latest transaction with Haitong will expand its panel of lenders to include international funders that will allow it to explore business opportunities regionally.

Going forward, Aspen said it is currently working with Haitong and affiliate firms — on an exclusive arrangement — to secure buyers and investors for the upcoming hotel projects, which includes the hotel to be developed in Aspen Vision City.