Further to the Company’s announcement dated 1 September 2020 on the appointment of Passion Venture Capital Pte Ltd as financial advisor to ManagePay Resources Sdn Bhd, a wholly-owned subsidiary of MPay, for a Green Energy Fund management setup, the Board of Directors of MPay wishes to announce that Coral Power Sdn. Bhd. (the “Borrower”) had on 22 October 2020 accepted the Letter of Offer dated 20 October 2020 (“Letter of Offer”) from ManagePay Resources Sdn. Bhd., a licensed moneylending company (the “Lender”), for a project financing of Ringgit Malaysia Thirty-Eight Million and Five Hundred Thousand (RM38,500,000.00) only (the “Facility”) to fund the Borrower’s development of 9.99mw Solar Photovoltaic (PV) Power Plant at PT 18535, Persiaran Segari, Mukim Pengkalan Baharu, Daerah Manjung, Negeri Perak Darul Ridzuan (“Project”) subject to terms and conditions in the Letter of Offer.

Salient Terms of the Facility

1.         Subject to all necessary licenses, consents, approvals having been obtained and all relevant documents are in full forces and effect including but not limited to the lease on the land where the Project is situated and consent by Tenaga Nasional Berhad (“TNB”) of the assignment of the Power Purchase Agreement (“PPA”) executed between TNB and the Borrower in favour of the Lender;

2.         Subject to successful fund raising by the Lender within forty-five (45) days from the date of execution of a formal Moneylending Agreement or such period as may be notified by the Lender to the Borrower.

3.         Guaranteed by the Borrower, its director, its holding company and third parties.

4.         The Borrower shall purchase and maintain at all times during the Facility period such relevant insurance coverages including but not limited to material damage, third party liability, workmen compensation and solar system.

5.         The Borrower shall immediately prepay the Facility in whole upon the occurrence of any of the following events:

(a)        termination of the PPA without a substituted power purchase agreement reasonably acceptable to the Lender;

(b)       any material change to the PPA where such change, in the opinion of the Lender adversely affects the Lender’s interests;

(c)        the Project has been abandoned by the Borrower and/or the Project becomes a total loss and/or destroyed beyond repair; and/or

(d)       any change in Borrower's current shareholdings without prior written consent from MPay.

6.         The Borrower may repay the Facility in full after eighteen (18) months from the date of first drawdown of the Facility (“Lock-In Period”) unless otherwise consented in writing by the Lender. During this Lock-In Period, all interest chargeable at twelve per centum (12%) per annum shall be borne and paid by the guarantor.

7.         In the event of cancellation of the Facility during the Lock-In Period, where applicable, all outstanding amount and interest accrued shall be payable in accordance with the provision herein.

Risk Factors

The Board of Directors noted that there will be construction completion risks and repayment risks arising from the Letter of Offer but has taken into account that these have been mitigated by the insurance coverages to be taken up and the guarantees given by the personal guarantors and the corporate guarantors, i.e. corporate shareholder of the Borrower and the Project’s EPCC contractor.

Financial Effects

The Board of Directors is of the view that the Letter of Offer is in the best interest of the Company and is expected to contribute positively to the earnings and net assets per share of the Company and its subsidiaries for the financial year ending 31 December 2020 onwards. The Letter of Offer will not have any material effect on the issued and paid-up capital of the Company and the substantial shareholders’ shareholding.

Directors’ and major shareholders’ interest

None of the Directors and/or major shareholders of MPay and/or persons connected with them have any interests, direct or indirect, in the Letter of Offer.

This announcement is dated 23 October 2020.