KUALA LUMPUR (May 5): Evergreen Max Cash Capital Bhd (KL:EMCC) announced on Monday that its subsidiary has secured a RM40 million loan from CIMB Bank to fund its pawnbroking business.
The pawnbroking service provider, Pajak Gadai E Assets Sdn Bhd (PGEA), accepted a letter of offer from CIMB on Monday for a RM40 million short-term revolving credit facility.
In a filing with Bursa Malaysia Securities, the company said the loan will be secured by a debenture with fixed and floating charges on pawned loan and interest receivables. It will also be backed by a letter of subordination for all current and future loans or contributions from the company.
PGEA has also provided an irrevocable letter of undertaking from its controlling shareholders that they will remain in control and key management roles.
On top of that, Evergreen will provide a corporate guarantee to the bank and ensure the jewellers' block insurance is assigned and renewed annually, with CIMB’s interest endorsed for added protection.
The additional loan will increase borrowings to RM152.84 million, up from RM112.84 million as of Dec 31, 2024, raising the group's gearing ratio from 0.48 to 0.64 times.
The loan is expected to boost the group’s earnings and earnings per share for the financial year ending Dec 31, 2025, but will incur a one-time expense of RM650,000 for loan acceptance.
Listed on the ACE Market in September 2023, the company operates in pawnbroking, gold retail and trading, and provides consultancy and information technology solutions to other pawnbrokers.
Shares of Evergreen closed unchanged at 30 sen on Monday, valuing the company at RM334.5 million. The counter has declined 16.67% this year.