Alset International to subscribe for convertible notes from American Medical REIT

U.S. five dollar currency notes bills; taken September 2018.U.S. five dollar currency notes bills; taken September 2018.

Alset International said Monday it entered a subscription agreement for US$8.35 million of convertible promissory notes from U.S.-based American Medical REIT (AMRE).

AMRE, which was formed to acquire and lease a portfolio of licensed medical real estate, is effectively 12.43 percent owned by Alset, the company said in a filing to SGX.

“The proposed subscription is to provide financial assistance to AMRE for the down payment for an acquisition of three hospitals from the LifeCare Group. The proposed acquisition of additional hospitals would increase the management fee income earned by AMRE Asset Management Inc., an indirect associate of the company and the manager of AMRE, from the expanded pool of hospitals,” Alset said.

“The provision of financial assistance also allows the company to earn a reasonable interest income each year,” the company added, noting the deal will be funded with internal resources.

The hospitals are Doc-LifeCare Pittsburgh LTACH, DOC-LifeCare Plano LTACH and DOCLifeCare FT. Worth LTACH, Alset said.

The conversion rate of the notes will be at US$10 a share, based on a previous share issuance to DSS Securities at US$10 a share, the filing said. The interest on the convertible note will be at 8 percent a year, and it will be due 25 months after issuance, the filing said.

Currently, AMRE’s shareholders are AMRE Asset Management, an indirect associate of Alset, with 0.33 percent, LiquidValue Asset Management, a wholly owned subsidiary of Alset, with 3.27 percent, AMRE Tennessee LLC with 3.27 percent and DSS Securities with 93.13 percent, the company said.

Alset holds around 9.70 percent of DSS Securities, while Chan Heng Fai, Alset’s executive chairman, executive director and group CEO and controlling shareholder of Alset, is deemed interested in around 27.83 percent of DSS Securities’ shares, the filing said.

Alset International is involved in land development, home building and property management.