Gelonghui, May 23 | Tibet Water Resources (01115.HK) issued an announcement. On May 22, 2024, the company and the subscriber signed a subscription agreement. According to this, the subscriber agreed to subscribe and the company agreed to issue bonds with a total principal amount of HK$90 million on the completion date (it is recommended to issue 10% convertible bonds due in 2024 with a principal amount of HK$90 million). Assuming that the bonds are all converted at an initial exchange price of HK$0.3, the bonds will be converted into 300 million shares, which is equivalent to approximately 6.55% of the company's existing issued share capital and approximately 6.15% of the issued share capital expanded through the issuance of converted shares.
The initial exchange price of HK$0.3 per share is approximately 9.09% premium over the closing price of HK$0.275 per share reported on the Stock Exchange on the last trading day. The subscriber (i.e. Wholeking Holdings Limited) is a company incorporated in the British Virgin Islands and wholly owned by HSBC International Trust Ltd. (the trustee of the Choi Family Trust, which is a discretionary trust established by Cai Kui). HSBC International Trust Limited (as the trustee of the above trusts) also indirectly holds a total of 37.276,000 shares.
The issuance of bonds is a strategic action for the company to attract powerful investors such as subscribers and can lead to business cooperation. The board of directors has fully considered the subscriber's background and believes that by introducing the subscriber as a potential shareholder (when it exercises the conversion rights attached to the bonds), the company will be able to further enhance the group's popularity and diversify the company's equity base. Since the subscription price of HK$90 million will fully offset the equivalent amount of the loan based on the $1 to $1 basis, the company will not collect cash proceeds from the bond issuance.
