Guangzhao Industrial Forest Biotechnology Group says it has entered into a subscription agreement dated with individuals Lim Chye Huat and Tan Sze Seng, who have been introduced by directors of the company.

Guangzhao says Lim will subscribe to 30 million new shares while Tan will subscribe to 12 million new shares at an issue price of 4 cents each to raise gross proceeds of $1.68 million.

$1.50 million from the net proceeds of $1.63 million will be used to meet the repayment schedule for the US$9.13 million ($12.16 million) in principal amount of interest bearing notes due 2011 issued to Liberty Habor Master Fund I, L.P.

The balance of the net proceeds will be used for general working capital.