SINGAPORE (July 15): Capital World, formerly known as Terratech Group, entered into a term sheet agreement on July 10 with two individuals – Yuan Zhiwei and Chng Chor Tong – relating to a proposed issuance of new ordinary shares of the company.

Capital World will be issuing about 916 million new shares at 2 cents each to raise about $18.3 million. The issue price represents a 13.04% discount to the volume weighted average price of 2.3 cents on the close of July 5, being the latest full market day before the term sheet was signed.

The group intends to use the funds raised for the development of the Capital City Project, partial repayment of existing loans and borrowings and for working capital purposes.

Upon completion of the subscription, Yuan will hold a 28.11% stake in the group, emerging as a controlling shareholder, while Chng will hold a 4.84% stake.

Yuan is currently a director and shareholder of Guizhou Honki Real Estate Development Company and Shen Zhen South Honki Investment, specialising in property development, property investment, and property management.

The investors will conduct their due diligence of the group and will be completed within two months from the date of the term sheet, subject to extension as mutually agreed between both the Investors and the company.

The proposed subscription is subject to shareholders’ approval at an extraordinary general meeting to be convened at a later date.

Siow Chien Fu, executive director and CEO of Capital World, says, ““This transaction not only strengthens the Group’s balance sheet but also attests to our proven business model. We are pleased to have a prominent real estate player in China as our shareholder. We believe the group will be able to draw on Yuan’s extensive industry experience and expertise in the future.”

Shares in Capital World last traded at 2.4 cents on Friday.