Reenova Investment Holding has taken out a $350,000 loan costing 12% a year to fund its planned reverse takeover of battery company 3DOM (Singapore).
The lender, JW Venture Capital, is wholly-owned by one Chiu Kim Wah (Zhao Jianhua) and its director is Frank Tay Zhi Cheng (Zheng Zhicheng).
Besides the 12% annual interest, upfront, there’s a late interest of 36% per annum.
Reenova, under executive chairman Chen Tong, has struggled to commercialise a rare earth concession it holds indirectly in Madagascar.
If the RTO is completed, Reenova will be dominantly controlled by 3DOM Singapore’3DOM Inc, which claims to possess capabilities to make lithium-ion batteries.
The US$1 billion RTO deal was announced last November.
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3DOM (Singapore) had wanted to RTO via another SGX listed company, restaurant operator Chaswood Resources.
Reenova has pledged various securities for the loan, including first priority over 300 million Reenova shares now held by Chen, who is acting as a personal guarantor.
In addition, there’s also the interest of 100% of Reenova Global which holds a 75% stake in Reenova Holding (Mauritius), which in turn owns 100% of Reenova Rare Earth (Malagasy) S.A.R.L.U, that holds the rare earth concession.
To fund the RTO, Reenova had raised funds from other sources previously.
Last November, it issued a $1.2 million one-year convertible loan to Evolve Capital Management Fund, carrying an interest of 6% per year and a conversion price of 0.07 cent.
When fully converted, Evolve Capital will hold just over 20% of Reenova.
Reenova shares have been suspended since Nov 2020.
