Global New Material to raise $190 million through convertible bond sale
Pearlescent pigment maker Global New Material International Holdings Ltd. (6616.HK) said on Friday it plans to issue Hong Kong dollar-settled 3.25% convertible bonds with an aggregate principal amount of 1.3 billion yuan ($194 million), due in September 2027. The initial conversion price is HK$10.93 per share, representing a 15.05% premium to the Sept. 17 closing price of HK$9.50.
Assuming full conversion, the bonds would be exchanged for about 139.1 million shares, representing 10% of the company’s enlarged share capital. Global New Material expects to receive net proceeds of about 1.28 billion yuan, equivalent to about HK$1.5 billion ($191 million). It plans to use 95% of the proceeds to refinance existing indebtedness, including funding a concurrent repurchase of existing convertible bonds. The remaining 5% is earmarked for working capital and general corporate purposes.
The company plans to repurchase its 4.25% convertible bonds issued in January this year at 103% of their principal amount plus accrued interest. As of the announcement date, eligible bondholders had committed to sell about HK$990 million in aggregate principal of those bonds, leaving about HK$10 million outstanding.
Global New Material’s shares opened higher on Friday and traded at HK$9.565 by the midday break, up 0.68%. The stock is up 17.6% over the past six months.
By Lee Shih Ta
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