Property developer Oxley holdings has received a $106.4 million investment through a convertible note issuance to funds managed by Dignari Capital Partners (DCP), a private equity firm based in Hong Kong.

The convertible notes, with an aggregate principal amount of up to US$80 million, will bear a coupon interest of 4.5 per cent per annum (calculated on an actual/360 day count basis) and is payable semi-annually. The maturity is 24 months with an option to extend by another 12 months, said Oxley in a pre-market filing on Thursday (Jan 7).

The notes can be converted into shares at an approximately 15 per cent premium to the volume-weighted average price per share 10 trading days prior to the date of the agreement.

For illustrative purposes and based on Oxley’s financial statements for FY2020, the issue of new shares under the terms of the convertible notes would dilute the group’s loss per share to 6.09 cents from 6.7 cents previously, while net tangible assets per share would remain unchanged at 0.24 cent.

In its regulatory filing, Oxley says it believes DCP, as a strategic investor with over US$1 billion in assets under management, will strengthen the group’s financing capabilities in the future.

The developer intends to use all of the estimated US$79.5 million of net proceeds from the convertible notes for working capital and general corporate purposes.

“We look forward to a fulfilling partnership together where we hope to leverage DCP’s expertise and full support to accelerate the growth of the company. I am confident that DCP Funds’ investment will position the company for our next phase of growth, where we launch into our key overseas projects,” said Oxley’s chairman and chief executive Ching Chiat Kwong.

Shares of the group closed flat at 22 cents on Wednesday.

Source: Straitstimes