The bonds may be converted into shares at the initial exchange price of HK $36.74 per share (subject to adjustment) under the terms and conditions below.
The initial exchange price (adjustable) will be HK $36.74 per share, which is about 40.5% higher than (I) the closing price premium of the shares on the stock exchange on 1 December 2020 (the last trading day before the signing of the convertible bond subscription agreement); (II) the average closing price premium of the shares for the five consecutive trading days ending on and including 1 December 2020; and (III) the shares as at 1 December 2020 The 10 day average closing price premium of 10 consecutive trading days (including that day) was about 40.8%.
Assuming that the bonds are fully converted at the initial exchange price of HK $36.74 per share, the bonds can be converted into 180447244 shares (or subject to adjustment), equivalent to about 0.7% of the issued share capital and about 0.3% of the voting rights of the company as at the date of this announcement, and about 0.7% and 0.3% of the issued share capital and voting rights of the company after the issuance of all exchange shares but before the completion of the subscription. The exchange shares will be allotted and issued by the company in accordance with the general authorization. Upon issue, the exchange shares will have the same status in all respects as the shares issued on the relevant registration date.
The bonds and exchange shares are not and will not be registered under the U.S. Securities Act and will not be offered or sold in the United States, except for transactions exempted from or not subject to the registration requirements of the U.S. Securities Act. The bonds are offered and sold outside the United States in accordance with regulation s of the Securities Act of the United States.
The estimated net proceeds (after commission and expenses) from the issuance of the bonds are about $889.6 million. The company intends to use the net proceeds for (a) increasing working capital to expand business; (b) investing to increase market share in major markets; (c) investing in strategic ecosystems; and (d) other general corporate purposes.
The issuer will apply to the SEHK for listing and trading of the bonds, while the company will apply to the SEHK for the listing and trading of the exchange shares allocated and issued by the bonds.
The issuance of the bonds is subject to the satisfaction and / or exemption (as the case may be) of the conditions precedent contained in the subscription agreement for convertible bonds. In addition, the subscription agreement of convertible bonds can be terminated in a number of cases. For further information, please refer to the paragraph of the convertible bond subscription agreement.
The board of directors is pleased to announce that the company, the seller and the agent have entered into a placing and subscription agreement on December 1, 2020 (after the trading period). Accordingly, the Seller agrees to appoint an agent and the agent agrees to act as the agent of the seller to cause the grantee to purchase (otherwise purchase) the placing shares at the allotment price of HK $23.70 per allotment share.
The allotment shares are equivalent to about 4.1% of the companys issued share capital and about 1.5% of its voting rights as at the date of this announcement, and about 4.0% and 1.5% of the voting rights of the company as expanded by subscription matters (assuming that, except for the issuance of subscription shares and the allotment shares are fully allocated, the issued share capital of the company has not changed from the date of this announcement to the completion of the subscription (including no bond conversion for exchange) Shares).
The placing shares will be allocated by the operator to not less than six independent professional institutions and / or individual investors who are independent third parties with their respective ultimate beneficial owners.
In accordance with the placing and subscription agreement, the seller has conditionally agreed to subscribe as a party to the subscription price and the company has conditionally agreed to issue the subscription shares (which will be equal to the number of allotment shares). Assuming that the allotment shares are fully allocated, the subscription shares are equivalent to about 4.1% of the companys issued share capital and about 1.5% of its voting rights as at the date of this announcement, and about 4.0% of the companys issued share capital and about 1.5% of the voting rights of the company as expanded by the subscription matters (assuming that, except for the issuance of subscription shares, the issued share capital of the company has not changed from the date of this announcement to the completion of the subscription (including no bond conversion) In exchange for shares).
The subscription shares will be issued in accordance with the general authorization and therefore no further approval of shareholders is required. The company will apply to the Listing Committee for subscription, listing and trading of shares.
The placing and subscription matters will not be completed until the conditions precedent to the placing and subscription agreement have been reached or (if applicable) exempted. For further information, please refer to the conditions of placing and conditions of subscription of this notice. If the conditions precedent to the subscription are not reached within 14 days after the date of the placing and subscription agreement (or such later date as may be agreed in writing between the company and the seller and in compliance with the Listing Rules), the obligations and liabilities of the company and the seller in respect of the subscription shall become null and void, and neither the company nor the Seller shall claim any costs, damages, compensation or other claims from the other party.
The placing price was HK $23.70 per share, representing a premium of about 9.4% over (I) the closing market price of the shares on the stock exchange on the last trading day of HK $26.15 per share; (II) the average closing price of the shares as at and including the last five (5) consecutive trading days was about HK $26.29 per share, with a discount of about 9.9%; and (III) the shares were quoted on the stock exchange for ten (10) consecutive trading days up to and including the last trading day The average closing price was about HK $26.10 per share, with a discount of about 9.2%.
Shareholders and prospective investors should note that (I) the issuance of bonds may not be completed; (II) the issuance of bonds and / or exchange shares may not be issued or listed; and (III) the placement and subscription may not be completed. Investors of the company are requested to act prudently in the trading of securities.
Source: Netease Financial Editor: Yang Bin_ NF4368