H2G Green (SGX:5AI) and RD Property Holdings agreed to grant a convertible loan of SG$11 million to H2G's 50.10% owned subsidiary, Green Energy Investment, according to a Monday filing with the Singapore Exchange.

Shares of the energy company surged over 14% in Tuesday trading.

Under the loan agreement, H2G can ask RD for a refundable deposit of SG$1 million. If the company asks for this deposit, it must secure the repayment by giving RD a charge over 250 ordinary shares in the subsidiary. These 250 shares make up about 12.5% of all Green Energy shares.

To date, the subsidiary has drawn down around SG$2.0 million. The parties have also agreed that the loan will first be utilized to repay outstanding principal amount and accrued interest owed to RD under a 2025 convertible loan agreement which was terminated on Feb. 25.

The loan will bear a simple interest at the rate of 4% per year.

In case the loan agreement is drawn in full, the lenders will have the option to jointly elect to convert the full outstanding amount in a certain number of conversion shares.