Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 3777)SUBSCRIPTION FOR CONVERTIBLE BONDS UNDER GENERAL MANDATE
On January 28, 2016 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Company has conditionally agreed to issue, and the Subscriber has conditionally agreed to subscribe for, the Convertible Bonds in an aggregate principal amount of HK$166,905,800.
Under the terms and conditions of the Convertible Bonds, the Convertible Bonds bear an interest of 6% per annum payable on the Maturity Date or on the date of redemption of the Convertible Bonds. If part or the whole of the Convertible Bonds has been converted into the Conversion Shares, there shall be no interest payable for that part or the whole of the Convertible Bonds. The Convertible Bonds will be convertible into Conversion Shares at a Conversion Price of HK$0.467 per Share. The maturity of the Convertible Bonds will be the date falling on the second anniversary of the date of the issue of the Convertible Bonds.
The Conversion Shares upon conversion of the Convertible Bonds will be allotted and issued under the General Mandate.
The Company will make an application to the Listing Committee for the listing of, and the permission to deal in, the Conversion Shares on the Stock Exchange. No application will be made by the Company to the Listing Committee for the listing of the Convertible Bonds.
Completion of the Subscription Agreement is subject to the satisfaction of the Conditions set out in the paragraph headed ''Conditions of the Subscription'' below. Please refer to the paragraph headed ''Principal Terms of the Convertible Bonds'' below for detailed terms of the Convertible Bonds. As the issuance of the Convertible Bonds is subject to the satisfaction of certain conditions precedent and may or may not proceed, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.
THE SUBSCRIPTION
On January 28, 2016 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Subscriber. Details of the Subscription Agreement and the principal terms of the Convertible Bonds are set out below.
THE SUBSCRIPTION AGREEMENT
Date : January 28, 2016
Parties : (i) the Subscriber; and
(ii) the Company
Information on the Subscriber
Zeta Buyout Fund SPC is a segregated portfolio company incorporated in the Cayman Islands with limited liability. Zeta Opportunities Fund SP is a segregated portfolio of Zeta Buyout Fund SPC. The principal investment objective of the Zeta Opportunities Fund SP is to achieve medium to long term capital appreciation by investing primarily in securities listed on the Stock Exchange, which are believed to have great potential of appreciation in stock value.
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Subscriber and its associates are third parties independent of the Company and the connected persons of the Company.
Subscription
Pursuant to the Subscription Agreement, the Company has conditionally agreed to issue, and the Subscriber has conditionally agreed to subscribe for, the Convertible Bonds in an aggregate principal amount of HK$166,905,800, which may be converted prior to the Maturity Date into 357,400,000 Conversion Shares (subject to adjustments) based on the initial Conversion Price upon full conversion. Upon completion, the Company should issue the Convertible Bonds to the Subscriber (or its nominees).
PRINCIPAL TERMS OF THE CONVERTIBLE BONDS
Interest
The Convertible Bonds bear an interest of 6% per annum payable on the Maturity Date or on the date of redemption of the Convertible Bonds. If part or the whole of the Convertible Bonds has been converted into the Conversion Shares, there shall be no interest payable for that part or the whole of the Convertible Bonds.
Maturity
The maturity of the Convertible Bonds will be the date falling on the second anniversary of the date of issue of the Convertible Bonds.
Unless previously redeemed, converted or purchased and cancelled, the Company shall redeem the Convertible Bonds which remain outstanding on the Maturity Date at 100% of the principal amount of such outstanding Convertible Bonds and pay an interest of 6% per annum (from the date of issue of the Convertible Bonds to the date of maturity of the Convertible Bonds (both dates inclusive)) by cash. The Company shall pay the interest on the Maturity Date or on the date of redemption of the Convertible Bonds.
Early redemption
Unless with the written consent of the Bondholder(s), no early redemption by the Company is allowed. If the Company receives a written consent for early redemption from the Bondholder(s), the Company shall redeem the Convertible Bonds which have not yet been converted into the Conversion Shares or redeemed on any Business Day before the Maturity Date at 100% of the principal amount of such outstanding Convertible Bonds and pay an interest of 6% per annum (from the date of issue of the Convertible Bonds to the date of redemption of the Convertible Bonds (both dates inclusive)) by cash.
The Bondholder(s) shall be entitled (but not obliged) to request the Company through the registrar to issue an early redemption notice in writing (the ''Early Redemption Notice'') to redeem all the outstanding Convertible Bonds at 100% of the principal amount of such outstanding Convertible Bonds and pay an interest of 6% per annum (from the date of issue of the Convertible Bonds to the date of early redemption of the Convertible Bonds (both dates inclusive)) within 10 days from the date of the Early Redemption Notice by cash in case of the occurrence of the following events:
unless required by the Listing Rules or at the request of the Stock Exchange, the Listing Committee, the Securities & Futures Commission of Hong Kong or under other law requiring the controlling shareholder of the Company to abstain from voting on the relevant transactions, the exercise of the voting power at any general meeting of the Company by Kemy Holding Inc., the controlling shareholder of the Company, is less than any other single Shareholder or Mr. Zhao Bing, the chairman of the Board and an executive Director, ceases to be the Company's chairman of the Board;
the Company' listing status is cancelled; or
the occurrence of any of the events of default.
Listing of the Convertible Bonds and the Conversion Shares
No application will be made for the listing of the Convertible Bonds on the Stock Exchange or any stock or securities exchange.
Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Conversion Shares.
Number of Conversion Shares issuable
As at the date of this announcement, there are 2,144,491,200 Shares in issue and upon full conversion of the Convertible Bonds at the initial Conversion Price, the Conversion Shares represent: (i) approximately 16.67% of the aggregate number of the issued Shares as at the date of this announcement; and (ii) approximately 14.29% of the aggregate number of the issued Shares as enlarged by the issue of the Convertible Shares (assuming that there is no change in the aggregate number of the issued Shares other than the issue of the Conversion Shares between the date of this announcement and up to and including the date of the full conversion of the Convertible Bonds at the initial Conversion Price).
Ranking of the Conversion Shares
The Conversion Shares shall rank pari passu in all respects with the Shares in issue on the date of allotment and issue of such Conversion Shares.
Conversion period
Subject to adjustments, the Bondholder(s) may convert the whole or part of the principal amount of the Convertible Bonds into the Conversion Shares at the initial Conversion Price for the period commencing from the expiry of the sixth month since the date of the issue of the Convertible Bonds up to the Maturity Date in the whole amounts or in amounts of not less than a whole multiple of HK$1,000,000 on each partial conversion.
Conversion Price
The price at which the Conversion Shares will be issued upon conversion of the Convertible Bonds will be HK$0.467 per Conversion Share. The Conversion Price represents:
a premium of approximately 11.19% over the closing price of HK$0.420 per Share as quoted on the Stock Exchange on the Last Trading Day; and
a premium of approximately 12.80% over the average closing price of HK$0.414 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day.
The net Conversion Price after deduction of all the relevant cost and expenses is HK$0.466 and represents:
(i) a premium of approximately 10.95% over the closing price of HK$0.420 per Share as quoted on the Stock Exchange on the Last Trading Day; and
China Fiber Optic Network System Group Ltd. issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 22:22:34 UTC
Original Document: http://www.chinafiberoptic.com/attachment/2016012906170100002421316_en.pdf
