Midea Group Co., Ltd. (Midea Group, 00300) announced that its wholly-owned subsidiary, Midea Investment Development Company Limited, has signed a subscription agreement to issue two series of zero-coupon guaranteed convertible bonds with a combined principal of HK$17.25 billion.
• Offer structure – 2027 Bonds: HK$8.62 billion, zero coupon, maturity on 11 May 2027, initial conversion price HK$96.82 per H share. – 2033 Bonds: HK$8.62 billion, zero coupon, maturity on 13 May 2033, initial conversion price HK$115.76 per H share. The parent company will provide an unconditional and irrevocable guarantee for both tranches.
• Conversion economics – The 2027 conversion price represents a 10.4 % premium to the last close of HK$87.70 on 6 May 2026 and a 9.7 % premium to the five-day average. Full conversion would create approximately 89.07 million new H shares (13.7 % of existing H shares; 1.2 % of total issued shares). – The 2033 conversion price is set 32.0 % above the last close and 31.1 % above the five-day average. Full conversion would add about 74.50 million H shares (11.4 % of existing H shares; 1.0 % of total issued shares).
• Potential dilution Assuming full conversion of both tranches, Bondholders would hold 163.57 million H shares, equal to 2.11 % of the enlarged total share capital. Existing public float requirements remain intact.
• Use of proceeds Net proceeds are estimated at HK$17.17 billion after commissions and expenses. Management intends to allocate roughly 60 % to international expansion and offshore liquidity enhancement, with the remaining 40 % for general corporate purposes.
• Key terms – 2027 Bonds are redeemable at par at maturity; the issuer may call the bonds from 13 August 2026 if the H-share price trades at least 120 % of the conversion price for 20 out of 30 consecutive trading days, or if less than 10 % of the issue remains outstanding. – 2033 Bonds will be redeemed at 114.95 % of principal at maturity. Bondholders have put options at 106.15 % on 13 May 2029 and 110.46 % on 13 May 2031. The issuer may call the 2033 Bonds if the outstanding principal falls below 10 %. – Both tranches carry negative-pledge covenants and investor protection clauses covering change of control, delisting and prolonged trading suspension.
• Listing and mandate The bonds are intended for listing on the Vienna MTF; conversion shares will be listed in Hong Kong. Shares required for conversion will be issued under the 20 % general mandate granted at the 30 May 2025 AGM, so no further shareholder approval is needed.
• Timeline and conditions Completion is targeted for 13 May 2026, subject to customary conditions precedent, including regulatory filings with the CSRC and, for the 2033 tranche, post-issuance filing with the NDRC. The subscription agreement allows the managers to terminate under specified adverse circumstances.
Investors are advised that the bond issuance and related share listings remain contingent on final satisfaction of the subscription conditions.
Comments