Allied Properties- a loan shark?

Allied Properties is the biggest shareholder  of Eurogold (EUG), which has been out of cash
and stock quotation for some time. Allied Properties has financed Eurogold with loan with
12 % interest
Eurogold is largest shareholder of Dragon Mining (DRA). Dragon has multiple problems, and shares are difficult to sell. Eurogold arranges an issues of the Dragon shares to its own shareholders. Allied Properties underwrites the issue of the shares with rate 0.13 A$ (current price 0,105 A$), the issue notes it forgets to tell that the issue is meant mainly for the payment of the high interest loan Allied Properties
http://hotcopper.com.au/threads/eug-cleaned-up-dra-next.2354071/

Similar pattern may have been continuing with Tanami Gold (TAM) where
Alllied Properties have been a major shareholder.

For example 2013 TAM provided Issue of shares to raise $65.3 million before costs,
and  Company repaid HK$464.3 million (approximately A$57.7 million) to extinguish its debt (including accrued interest and charges) to AP Finance Limited. After the issue of shares
the company started a new loan facility with Allied Properties (AP) Finance and with Sun Hung Kai International Bank (Brunei) Limited (SHKIBBL), which is also associated with the owner of Allied, Mr Lee Seng Hui

For other shareholders it would be cheaper to rise enough
money in the issue of new shares. However, the company decides
to use expensive loan facilities from the controlling major shareholder..

Note that the Allied/Eurogold managers seem to remain in Dragon after
the issue,and Allied likely stays as a major shareholder. Dragon directors
Gunzberg and Dew are also directors in Allied.

Interestingly the Future Rise Investments, which helped to take
over the board of Dragon in February is a client of
Sun Hung Kai International Bank (associated with Mr Lee of Allied as director)


Details in Annual financials of Tanami Gold (TAM) 2013:
Page 6
Fully underwritten pro-rata renounceable Entitlements Issue  
On 4 February 2013, the Company announced it had reached an agreement with Patersons Securities Limited to underwrite a renounceable pro- rata Entitlement Issue (‘Issue’ or ‘Offer’) to raise $65.3 million before costs.  
The Issue was made to eligible shareholders at an issue price of 20 cents per share on the basis of 5 new shares for every 4 shares held.  The Issue was strongly supported by shareholders with 91% of the shares on offer (including shortfall applications) taken up by existing shareholders.  
The Company used the funds raised under the Offer as follows:  
 Repayment of outstanding debt to AP Finance Limited including accrued interest and charges (approximately A$57.7 million);  
 Completion of the DFS at CTP;   
 Expenses of the Offer; and   
 Additional working capital.  
Repayment of outstanding debt to AP Finance Limited  
Following the Entitlement Issue, the Company repaid its loan facilities with AP Finance Limited.  In total the Company repaid HK$464.3 million (approximately A$57.7 million) to extinguish its debt (including accrued interest and charges) to AP Finance Limited.  
Of this amount, A$35.0 million was paid in March 2013, A$6.5 million was paid in April 2013 and the balance of A$16.2 million offset against the entitlement of Allied Properties Resources Limited (and shortfall allocation) under the Entitlement Issue.  

Loan Facility with Sun Hung Kai International Bank (Brunei) Limited (SHKIBBL)  

On 5 April 2013, the Company announced that it had entered into an A$15.0 million unsecured loan facility with SHKIBBL.
At 30 June 2013, the Company had drawn down A$9.0 million under its loan facility with SHKIBBL leaving A$6.0 million in unused funds remaining.   

TAM annual financials 2013:
Page 25

At 30 June 2013, the Company had drawn down a total of A$9.0 million under its existing A$15.0 million loan facility with Sun Hung Kai International Bank (Brunei) Limited (‘SHKIBBL’); an entity associated with Mr Lee Seng Hui who is a Director of the Company.  The A$15.0 million loan facility with SHKIBBL is classified as a current liability at 30 June 2013.  On 24 September 2013, the Company signed a Supplementary Loan Agreement with SHKIBBL extending the loan facility repayment date out to 31 March 2015 (all terms and conditions are consistent with the original agreement).    
The Company has obtained a letter of support from AP Finance Limited (of which the ultimate holding company is Allied Group Limited an entity associated with Mr Lee Seng Hui).  The letter of support confirms AP Finance Limited’s commitment and ongoing support to the Company via the provision of a legally binding unsecured loan facility of approximately A$12 million.  The Company’s cashflow forecast shows the Company will be able to fund its Kavanagh drilling and ongoing care and maintenance program to at least 12 months from the signing date of this report given the expected proceeds of debt funding from AP Finance Limited.   
The terms attached to the provision of the AP Finance Limited unsecured loan facility are:
 An interest of 6% payable quarterly in arrears;  A non-refundable facility fee for each month applicable to each advance at the rate of 3% per annum of that advance and a further refundable facility fee for each month applicable to each advance at the rate of 3% per annum of that advance, both payable monthly in advance (the latter fee is refundable in respect of any prepaid or repaid principal indebtedness for any days remaining in the month in which the principal indebtedness is repaid in part or whole); and  Repayment date of the unsecured loan facility will be 31 March 2015.  
The Company may also be required to source additional cash from debt or equity markets or from the sale of other assets.  The Company has demonstrated historically that it can raise funds through both debt and equity avenues and can repay its debts as and when they fall due.