Announces Proposed Issue of up to USD180 Million
Hong Kong, Nov 8, 2013 AEST (ABN Newswire) - The world's largest monosodium glutamate ("MSG") and xanthan gum producer, Fufeng Group Limited (
HKG:0546)("Fufeng" or the "Company", together with its subsidiaries, the "Group"; stock code: 546) today announces the Company has entered into a Subscription Agreement, pursuant to which the Joint Bookrunners have agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Firm Bonds to be issued by the Company in an initial aggregate principal amount of RMB975 million (equivalent to approximately US$160 million) USD Settled 3.0% Convertible Bonds due 2018 (convertible into fully-paid ordinary shares with a par value of HK$0.10 each in the share capital of the Company).
In addition, the Company has granted to the Joint Bookrunners an option (the "Option") to subscribe for all or any of the Option Bonds up to a further aggregate principal amount of RMB125 million (equivalent to approximately US$20 million), and the Option shall be exercisable on one or more occasions, in whole or in part, solely at the discretion of the Sole Global Coordinator, at any time on or before the 30th day following the Closing Date.
For the deal, the Company appointed J.P. Morgan as Sole Global Coordinator and Joint Bookrunner, Standard Chartered Bank as Joint Bookrunner and China Galaxy International Securities (Hong Kong) Limited as Co-Manager.
Based on the initial Conversion Price of HK$4.173 (represents a premium of approximately 30.0% over the closing price of HK$3.21 per Share on the Last Trading Day) and assuming full conversion of the Bonds (assuming the Option Bonds are issued in full) at the initial Conversion Price, the Bonds will be convertible into 335,206,044 Shares, representing approximately 16.06% of the issued share capital of the Company as at the date of this announcement and approximately 13.84% of the enlarged issued share capital of the Company.
The gross proceeds from the issue of the Bonds (assuming the Option is not exercised) is approximately US$160 million or if the Option Bonds are issued in full, US$180 million. The Company will receive net proceeds in the amount of US$175.4 million from the issue of the Bonds (assuming the Option is exercised in full). The Company intends to use the net proceeds, whether or not the Option is exercised in full, for the repayment in full of the existing syndicated loan and general corporate and working capital purposes.
The Directors consider that the issue of the Bonds can help restructure the Company's existing debt and effectively lower finance costs, which is in the interests of the Shareholders and the Company as a whole.
In addition, an application will be made to the Singapore Stock Exchange for the listing of the Bonds on the Singapore Stock Exchange.
About Fufeng Group Limited
Fufeng Group (
HKG:0546) is the world's largest producer of MSG, xanthan gum and a major supplier for a series of bio-fermentation products. The main products of the Group are food additives, animal nutrition, colloid and high-end amino acids. In fiscal 2016, Fufeng generated sales of approximately RMB11.2 billion and profit attributable to shareholders of about RMB1.09 billion. For more information, please visit our website www.fufeng-group.com
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