Australian & Sino focused ASF Group (ASX: AFA) has successfully negotiated an additional A$1 million in funds under the $7 million convertible loan facility the company previously secured with Star Diamond Developments.
Under the revised agreement, Star Diamond Developments has also agreed to extend the loan maturity date for the total funds to 23 August 2013.
The extension to the loan maturity is intended to provide both companies with ample time to discuss a number of possible and mutually beneficial loan conversion arrangements.
The funds will be used as working capital allowing ASF to transform several of its projects and achieve expansion of its successful business model.
ASF is fairly unique among ASX-listed public companies in Australia as a creator and facilitator of two-way cross-border investments, trade and technology transfers between China and Australia.
It has access to significant pockets of funds from mainland China.
Since its transformation into a Sino-Australian investment and trading house in 2006, ASF has focused principally on the identification, incubation and realisation of embryonic opportunities across various industries.
Loan facility terms
Under the revised greement, interest will be payable at the rate of 1% per month, accrued monthly. The interest will accrue from the date funds are drawdown.
Any loan amount outstanding at the loan maturity date will be satisfied by the issue of ASF shares at an issue price equal to a 10% discount below the 30-day volume weighted average price in the period up to one trading day immediately prior to loan maturity.
Alternatively, subject to further agreement between the parties, the loan facility can be fully repaid prior to loan maturity by conversion of the loan into either one or a combination of ASF shares or into new shares of an ASF subsidiary or investments held by such subsidiaries.
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