YuuZoo says it has secured commitment for $30m equity facility

It is unclear how YuuZoo will be able to tap the $30 million commitment, given that its stock has been under an SGX-imposed suspension since last year and there is still no sign on when it might be lifted.
It is unclear how YuuZoo will be able to tap the $30 million commitment, given that its stock has been under an SGX-imposed suspension since last year and there is still no sign on when it might be lifted.ST PHOTO: BENJAMIN SEETOR

Three-year drawdown deal is with Asia Financial Group, says suspended social commerce firm

Troubled social commerce company YuuZoo Networks Group Corp said it has secured a $30 million funding commitment from Asia Financial Group (AFG).

YuuZoo told the Singapore Exchange (SGX) yesterday that it can draw down up to $30 million over three years by issuing shares to AFG at a 7.5 per cent discount to the closing price of the stock on the drawdown date.

The firm did not provide details about AFG and gave only a brief summary of the terms of the deal in its filing.

It is also unclear how YuuZoo will be able to tap this commitment given that its stock has been under an SGX-imposed suspension since last year and there is still no sign on when it might be lifted.

The agreement will also see YuuZoo issuing 65 million warrants to AFG, each carrying the right to subscribe to one new ordinary share in the company at a 10 per cent premium to the three-day average market price of YuuZoo stock.

If AFG fully exercises the options, YuuZoo, which offers services in social networking, e-commerce and gaming, will get an additional $2.72 million in funds, the statement said. The deal is subject to approval by SGX and YuuZoo shareholders.

Attempts to contact the company yesterday were unsuccessful. The contact person provided by YuuZoo was its former Singapore chief executive Mohandas, who the company is now describing as a non-executive director.

But Mr Mohandas, who goes by one name, said he no longer works for the company and does not represent it.

The announcement about the AFG deal was submitted to SGX by YuuZoo non-executive chairman Anthony Williams.

It came a day after the firm revealed it had shut down all of its operations in Singapore, including laying off all staff here. Its landlord at its now-vacated offices in Teletech Park had issued a notice on unpaid rent.

YuuZoo had also said on Monday that its shares were first suspended in March last year after its then auditor, RT LLP, failed to reply to queries from SGX.

But RT LLP noted on Monday that a disclaimer had been issued to YuuZoo in response to the questions posed by SGX, because the auditor had been "unable to form an opinion due to limitation of scope".

The Commercial Affairs Department, which pursues white-collar crime, has been investigating YuuZoo after SGX raised questions about the company's accounts last year.

SGX has said it will lift the suspension when it is satisfied that the firm's shares can be traded on a fair, orderly and transparent basis.

A version of this article appeared in the print edition of The Straits Times on March 20, 2019, with the headline 'YuuZoo says it has secured commitment for $30m equity facility'. Print Edition | Subscribe