Part of the plan is converting existing shareholder loans and accrued interests.
Singapore healthcare company OUE Lippo Healthcare Limited will be rolling out a recapitalisation plan that will see existing shareholder loans and accrued interest of $189.6m into equity in the form of 4% convertible perpetual bonds.
These bonds, called perpetual securities, will be convertible into ordinary shares of the company at 7 cents per share, subject to adjustments in accordance with the terms and conditions of the perpetual securities.
“Redemption of and any future distributions on the perpetual securities will be at the sole discretion of the company and there is no fixed redemption maturity deadline. Any distribution on the perpetual securities will not be charged as expense in the financial statements of the group. In addition, for a period of about 5.5 years from the date of issuance, the perpetual securities are both non-redeemable and non-convertible into ordinary shares of the company,” the firm said.
The indicated fair value of the perpetual securities is $77.3m that will result in a one-off indicative gain of $112.3m to OUE Lippo Healthcare’s comprehensive income for the FY ending 31 December 2021.
There will also be recurrent interest savings in the financial results of the company of about $6.6m per year as there will be no more interest payment on the existing shareholder loans which will be converted into perpetual securities.
Additionally, the net tangible assets (NTA) and NTA per share of the company will also improve from $138.2m and 3.11 cents per share to $327.8m and 7.38 cents per share.
The recapitalisation plan is part of a series of ongoing strategic initiatives undertaken by the company to strengthen its financial position, starting with the injection of shareholder loans from OUE Limited in 2017 through the existing shareholder loans, followed by a private placement to ITOCHU Corporation and a rights issue in 2018.
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