Asian investment firm Orchard Capital Partners (OCP) has sold off almost 66 million shares in Donaco International Limited previously held by the latter’s founder, Joey Lim.
A Wednesday filing by Donaco showed that OCP had offloaded the shares at 11 cents per share, recouping a total of just under AU$7.2 million and reducing Lim’s holding in Donaco by around 8%.
The sell-off comes after Lim secured a US$34.3 million loan from OCP in early 2017 via one of his entities, Total Alpha Investments Limited, in a deal that included the issuance of senior secured bonds and granting of share options over Donaco shares.
When Lim defaulted on a loan repayment late last year, OCP enforced its security interest over his entire 27.25% stake, giving it the power to vote on and sell Lim’s 37.7 million direct and 164.3 million indirect shares.
According to Wednesday’s filing, OCP offloaded the first 65.9 million of Lim’s indirect shares on 19 June, reducing his stake to around 19% of issued share capital. The proceeds of the sale are listed as going to OCP Group.
It’s been an eventful few months for both OCP and Lim. In early May, following a complaint from Lim himself, Australia’s Takeovers Panel ruled that an on-market acquisition by OCP of a further 9.71% stake in Donaco in December 2018 was invalid because the market was unaware at the time of OCP’s security interest in Lim’s shares.
Three weeks later, another group of new shareholders used their combined voting power to file a formal request for an EGM to consider the removal of both Joey Lim and his brother Benjamin from the Donaco board.