Viagold Capital - the Australian-listed company buying a 32 per cent stake in troubled publisher Culturecom Holdings - has the right to transfer the stake to its own controlling shareholder Harvest Smart Overseas if it decides against proceeding with the acquisition.
In response to an Australian Stock Exchange (ASX) query, Viagold also revealed that its proposed $21 million purchase of the Culturecom stake from Sing Tao Holdings was being funded by a loan from Harvest Smart.
If during due-diligence investigations in the next three months Viagold did not like what it saw, it could transfer the Culturecom stake to Harvest Smart in full settlement of the loan, the firm said yesterday.
Harvest Smart is jointly owned by Californian attorney Henry Chang Manayan, Californian accountant Joseph Lee Chennault, Californian systems analyst Brian Kronstad and Kung Tien-mei.
Viagold also told the ASX it had 'developed a comprehensive business plan which identifies strategies that it believes will result in Culturecom achieving break-even or profitability within six months'.
Culturecom, which publishes the Tin Tin Daily News and comic books, suffered a $75.62 million loss in the year to March.
