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| Wednesday, 3 November 2010, 23:30 HKT/SGT | |
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Source: MEC | |
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HONG KONG, Nov 3, 2010 - (ACN Newswire) - On 3 November 2010 (after trading hours), the Company entered into the Subscription Agreement with the Subscribers under which the Company (i) agreed to issue, and the Subscribers agreed to subscribe for, the Note in the principal amount of HK$466,800,000; and (ii) granted to the Subscribers the Subscribers' Option exercisable within six (6) months of the issue of the Note, to subscribe for the Second Note in the principal amount of HK$311,200,000. The initial conversion price under the Note and the Second Note are HK$3.4 per Share (subject to adjustments) and HK$4.4 per Share (subject to adjustments) respectively. The weighted average conversion price, if both the Note and the Second Note are issued, is HK$3.74 per Share (subject to adjustments).
Upon full conversion of the Note at the initial conversion price of HK$3.4 per Share (subject to adjustments), a total of 137,294,116 Conversion Shares will be issued, representing approximately 2.25% of the total issued share capital of the Company as at the date of this announcement and approximately 2.20% of the Company's total issued share capital as enlarged by the issue of the Conversion Shares pursuant to the Note. Upon full conversion of the Second Note at the initial conversion price of HK$4.4 per Share (subject to adjustments), a total of 70,727,271 Conversion Shares will be issued, representing approximately 1.16% of the total issued share capital of the Company as at the date of this announcement and approximately 1.12% of the Company's total issued share capital as enlarged by the issue of the Conversion Shares pursuant to the Note and the Second Note.
The Conversion Shares are to be issued pursuant to the general mandate granted by the Shareholders at the AGM. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares to be issued upon exercise of the conversion rights under the Note and the Second Note, if appropriate.
The net proceeds from the Note is expected to be approximately HK$452.3 million. The net proceeds from the subscription of the Second Note is expected to be approximately HK$301.8 million, if the Second Note is issued. The net proceeds of the Note and the Second Note, if any, are intended to be used for the Khushuut coking coal project and the general working capital of the Group, including any possible future acquisitions.
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Subscribers are third parties independent of the Group and its connected persons.
Access the full subscription agreement at the HKEx: www.hkexnews.hk/listedco/listconews/sehk/20101103/LTN201011031236.pdf.
The Subscribers
Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor Finance (SI) Ireland Limited. The investment manager of the Subscribers is OZ Management LP. OZ Management LP is an operating entity of Och-Ziff Capital Management Group LLC. Och-Ziff Capital Management Group LLC is a leading global institutional management firm with approximately US$27.2 billion of assets under management as of 1 November 2010.
Reasons for the Subscription and Use of Proceeds
The Company is an energy and resources developer. The Group is currently focusing on the development of its initial coking coal mining project in Khushuut, Khovd Province, western Mongolia. The Group has begun its mining operation at Khushuut.
To facilitate the coking coal production, on 9 April 2010, the Group had entered into the Road Surface Contract consisting principally of asphalt pavement of the roadway and construction of some surface stations along the roadway of approximately 340 kilometers with an independent contractor for RMB488,240,940. As at the date of this announcement, the road surface pavement has been substantially completed.
Although the Company has raised HK$300 million from Golden Infinity by the issue of the GI Convertible Note, it is prudent for the Company to have additional working capital and funding for the Khushuut coking coal project and for the general working capital of the Group. It will also provide cash flow for the Group in potential acquisition (if any) which is beneficial to the development of the Group.
In view of the above, the Directors consider that the respective terms of the Subscription Agreement, the Note and the Second Note are normal commercial terms and fair and reasonable, and the transactions contemplated under the Subscription Agreement are in the interests of the Group and the Shareholders as a whole.
The net proceeds from the Subscription of the Note is expected to be approximately HK$452.3 million. If the Subscribers exercise the Subscribers' Option and the Second Note, the net proceeds from the Subscription of the Second Note is expected to be approximately HK$301.8 million. The net proceeds are intended to be used for the Khushuut coking coal project and the general working capital of the Group, including any possible future acquisitions (if any).
Contact:
MEC
Mr. Gordon Poon - Director of Corporate Development and Investor Relations
Ms. Jasmine Lau - Investor Relations Manager
Tel: +852-2138-8000
Fax: +852-2138-8111
Email: ir@mongolia-energy.com
Website: www.mongolia-energy.com
Strategic Financial Relations Limited
Veron Ng
Tel: +852-2864-4831 / 9731 2721
Email: veron.ng@sprg.com.hk
Ming Chan
Tel: +852-2864-4892 / 9380 8766
Email: ming.chan@sprg.com.hk
Katrina Leung
Tel: +852-2864-4857 / 6771 4711
Email: katrina.leung@sprg.com.hk
Shirly Chan
Tel: +852-2864-4883 / 9490 5449
Email: shirly.chan@sprg.com.hk
Topic: Issue of Stocks/Bonds
Source: MEC
Sectors: Metals & Mining, Daily Finance
http://www.acnnewswire.com
From the Asia Corporate News Network
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