Guming (01364) has announced its proposal to conduct an international offering of Hong Kong dollar-denominated convertible bonds. These bonds will be issued by a wholly-owned subsidiary of the company and guaranteed by the company, with the offering targeted exclusively at professional investors outside the United States.
Goldman Sachs (Asia) L.L.C. has been appointed as the sole global coordinator, sole bookrunner, and sole lead manager for the proposed bond offering. The company currently intends to use the net proceeds from the proposed bond offering for overseas expansion, procurement of raw materials and equipment, debt repayment, share repurchases (including but not limited to the concurrent share buyback), and general corporate purposes.
Concurrently with the proposed bond offering, the manager proposes to facilitate the sale of existing shares related to the bond's notional amount by professional investors intending to sell via a guaranteed short sale mechanism (the concurrent Delta placement). The company intends to purchase the shares sold in this concurrent Delta placement.
The announcement states that the bond issuance constitutes a major transaction. The concurrent Delta placement is expected to facilitate professional investors in establishing initial hedge positions for their bond investments.
The concurrent share repurchase is anticipated to support hedging arrangements related to the bonds, aid in the execution of the proposed bond offering, and mitigate any potential negative impact on the share price that might arise from these hedging activities.
The number of shares involved in the concurrent Delta placement will be determined upon pricing of the proposed bond offering and is expected to roughly correspond to the initial hedge positions established by these professional investors for the bonds. The company will not issue any new shares under the concurrent Delta placement.
The board of directors believes that the concurrent share buyback reflects the confidence of the board and management team in the company's long-term strategy and growth. It is also considered to be in the overall best interests of the company and its shareholders (and is not intended to provide an exit opportunity for specific shareholders).
The issuance of the bonds and the concurrent share repurchase are not expected to result in any significant changes to the shareholding structure of the company's major shareholders.
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