Zhitong Financial APP News, Oriental Payment Group Holdings (08613) announced that on February 16, 2024, the company entered into a subscription agreement with the subscriber Blu Venture Partners, LLC, and the company conditionally agreed to issue to the subscriber, and the subscriber conditionally agreed to subscribe for convertible bonds with a principal amount of 438HK$80,000 at an exchange price of 0HK$145.
Assuming that there is no change in the total issued share capital of the Company, the Exchange Shares will account for approximately 157%。The exchange price of each exchange share is 0HK$145 is equivalent to the closing price of the shares quoted on the Stock Exchange on 16 February 2024, which is the date of the subscription agreementHK$145.
According to the announcement, the company incurred outstanding debts amounting to 56$110,000 (equivalent to about 438.)HK$80,000) due to service fees for BCODE projects, such as business development expenses, technical management expenses and IT technical support. The amount has been overdue for a number of consecutive periods of time. The Company and the Subscriber have agreed to refinance the debt amount through the issuance of convertible bonds. The decision was made after considering two important factors: extending the maturity date of the debt amount, which would allow the Group a reasonable time to improve its financial performance and net current debt position; and maintaining a positive relationship with the subscriber will allow the Group to continue to receive deferrals in relation to its BCODE operations.
The Company has explored various ways to raise funds to repay the debt amount, such as debt financing, rights issue, public offer and share placing. However, due to the Group's recent loss position, the Company believes that obtaining additional debt financing from banks or financial institutions may result in unfavourable financing terms and lengthy negotiations. On the other hand, rights issues, open offers and share placements will require identifying and negotiating the terms of the placement with suitable underwriters for placing**. The preparation of compliance and legal documents together with other application and administrative procedures is relatively time-consuming and cost-effective. Furthermore, in the current volatile market conditions, it is challenging to estimate market demand and determine the success of fundraising.
In addition, notwithstanding the dilutive effect of the allotment and issue of Redemption Shares on existing shareholders, the Directors believe that the subscription will help the Group alleviate repayment pressure, strengthen its capital structure and retain cash flow for future business development. Therefore, the dilution effect is seen as reasonable. After evaluating the advantages and disadvantages of various fundraising methods, the Company has concluded that the subscription is a more efficient, cost-effective and appropriate fundraising method for the Group.
This article is from: Zhitong Financial Network.