AIQ Limited Settles $1.1 Million in Director Loans and Note Interest

AIQ Limited has settled financial obligations by repaying interest-free director loans and distributing accrued interest on convertible notes to key shareholders. This action addresses debt incurred over the past two years and changes how the company manages its balance sheet by clearing liabilities held by its leadership team.

"The payment terms are fair and reasonable for the Company’s shareholders," said Harry Chathli, Independent Non-Executive Chairman of AIQ, in a statement regarding the settlement.

Debt Repayment Breakdown

According to a company announcement, AIQ repaid $280,000 and £666,000 to Executive Director and significant shareholder Li Chun Chung. These funds covered interest-free loans extended to the company between July 5, 2024, and March 31, 2026.

In addition to the principal loan repayments, the company distributed accrued interest on convertible loan notes originally executed on January 24, 2022. The payments were distributed to three noteholders:

• Li Chun Chung: £54,349.42
• Soon Beng Gee: £27,174.71
• Lee Chong Liang: £27,174.71

Related-Party Transactions

These transactions are classified as related-party settlements under corporate governance standards. Li Chun Chung, Soon Beng Gee, and Lee Chong Liang hold a combined 38.5% shareholding in AIQ. The involvement of an Executive Director in the loan structure necessitates regulatory scrutiny to ensure that financial arrangements do not unfairly benefit insiders at the expense of minority shareholders.

Convertible notes are debt instruments that allow the holder to convert the debt into a predetermined number of company shares at a later date. By paying out the accrued interest, AIQ is servicing its debt obligations without triggering the conversion mechanism, which would otherwise dilute the equity held by existing shareholders.

Financial Implications

Clearing interest-free director loans helps a company simplify its capital structure and reduce the risk of sudden repayment demands. The repayment of these loans, combined with the interest settlement on convertible notes, reduces the firm's total outstanding liabilities. This financial activity indicates how the company manages liquidity when borrowing from internal stakeholders instead of traditional commercial banking channels.