SINGAPORE - Xpress Holdings and its founder Fong Kah Kuen are bringing in a strategic investor into the company.

They signed a non-binding framework agreement with Mr Ma Wei Dong last week to subscribe for 1.1 billion Xoress shares at 0.7 cent apiece.

Mr Ma, who is taking up the shares in his personal capacity, is chairman of of China-based Kunming LuChen Group Co.

Each share will come with two detachable warrants, which may be converted into new shares at an exercise price of 0.7 cent apiece.

The warrant will have a lifespan of five years.

If the warrants are exercised in full, the subscription agreement will raise $23 million in fresh capital for Xpress.

Mr Ma will also grant Xpress an interest-free loan of 10 million yuan (S$2 million), of which half has already been disbursed to the company following the execution of the memorandum of understanding.

The loan is secured by a second mortgage over a property owned by Mr Fong and his wife.

Following completion of the share subscription, Mr Ma will become the single largest shareholder of Xpress, with a shareholding of more than 31 per cent.

If the warrants are exercised in full, his stake will be raised to 57 per cent.

Xpress intends to use the funds raised to strengthen its financial position and for expansion via mergers and acquisitions.

An estimated $7 million will be used to settle outstanding debts of the company and for working capital.