Singapore Institute of Advanced Medicine Holdings to pay off S$3.4M loan by issuing new shares at 9 cents each

SINGAPORE: Newly-listed Singapore Institute of Advanced Medicine Holdings plans to pay off loans worth S$3.4 million. Instead of using cash, they will give creditors new shares at a price of 9 cents each, The Edge Singapore reports.

The company is led by the executive director and CEO, Dr Djeng Shih Kien, and it was listed on Feb 16, with shares starting at 23 cents each. However, by March 15, shares had dropped to just 10 cents.

On March 17, the company announced that, under the terms of the loan, it has the option to settle its debts with this group of creditors by issuing new shares at a discounted rate.

Here’s how it works: The company can settle its debts by giving creditors new shares at a lower price than what the shares are currently worth on the market. They’ll offer a 10% discount off the average price per share over the five days leading up to the conversion.

To address its financial obligations, the company is set to issue approximately 33.3 million shares to ISQuare, one of its creditors, which extended a loan amounting to S$3 million.

In addition, the company is issuing 1.11 million shares each to several lenders who individually loaned S$100,000. These lenders include Lee Ting Ni, Dr Yeo Khee Quan, Anthony Lim Gek Seng, and Low Ming Wah.

The company can save its cash reserves by giving out new shares instead of cash. This helps improve its cash flow and gives it more money to cover everyday general overheads, financing requirements, and other operating expenses.

The issuance of new shares will expand the company’s share base by approximately 3.75%, resulting in around 1.045 million shares. /TISG