China VAST Industrial Urban Development Co. Ltd. expects to raise net proceeds worth approximately US$157.4 million from the issuance of up to US$50.0 million of convertible notes and three series of notes aggregating to a maximum of US$110.0 million.
The company said in a release that it signed a conditional subscription agreement for the notes with initial investor Chance Talent Management Ltd.
The convertible notes may be converted at a price of HK$4.75 per conversion share. Following full conversion of the notes, China VAST will issue a total of 82,105,263 conversion shares, with a HK$821,052.63 aggregate nominal value, representing approximately 5.01% of the company's existing issued share capital. The conversion price reflects a premium of roughly 12.83% over the HK$4.21 per-share closing price as at Dec. 22.
Aside from the convertible notes, due 2020, China VAST will issue notes worth up to US$16.0 million, US$32.0 million and US$62.0 million. The respective notes will mature after a period of 12 months, 24 months and 36 months in 2018, 2019 and 2020, starting from the date of issuance.
All the notes will bear a 6% annual interest.
The company plans to use the net proceeds for general working capital.
Profit East Ltd., Shing Cheong Holdings Ltd., China VAST International Holdings Ltd., Sheng Shi International (HK) Development Ltd. and King Billion Corp. Ltd. will serve as guarantors of the notes, alongside executive director and board chairman Wang Jianjun and nonexecutive director Zhao Ying.