FIRST CAP GP (01269) announced that on January 2, 2026, after trading hours, the company entered into a restructuring support agreement with initial participating creditors. Under this agreement, they have consented, among other things, to support and facilitate the proposed restructuring and the proposed scheme of arrangement.
The proposed restructuring of the existing debts is intended to be implemented by way of a scheme of arrangement under Hong Kong law. Each scheme creditor will have the option to choose one of the following cash repayment alternatives: Option 1: Payment of 1.5% of the outstanding principal amount of the relevant scheme creditor's claim and its accrued interest, to be paid in five (5) equal annual installments over five (5) years; or Option 2: Payment of 1.0% of the outstanding principal amount of the relevant scheme creditor's claim and its accrued interest, to be paid in a single lump sum within ninety (90) days after the restructuring effective date or thirty (30) days after the adjudication of the relevant claim, whichever is later.
In addition to the cash repayment, each scheme creditor will receive new shares in the company. The number of shares will be equivalent to the full outstanding principal amount of the relevant scheme creditor's claim and its accrued interest as of the restructuring effective date (excluding that date), after deducting the cash repayment amount payable as outlined above, divided by the issue price.
The new shares issued to the scheme creditors will be subject to a lock-up period. Prior to the issuance of new shares under the proposed scheme, the company will implement a capital reorganization, which may include a consolidation of the company's shares and/or a change in their par value.
The capital reorganization will require approval from the company's shareholders and The Stock Exchange of Hong Kong Limited, and must be implemented on or before the restructuring effective date. Following the payment of the cash portion and the issuance of new shares under the restructuring support agreement, all claims of the scheme creditors will be deemed fully compromised, paid, and discharged.
The scheme creditors will no longer have any claims against the company or any member of the group regarding their claims, and all documents governing and evidencing the scheme creditors' claims will be canceled and become void. During the put option period, commencing on the fifth (5th) anniversary of the restructuring effective date and ending on the eighth (8th) anniversary, and subject to applicable laws and regulations, each scheme creditor will have the right (but not the obligation) to require the investor to purchase up to ten percent (10%) of the new shares issued to that scheme creditor at the issue price, or to require the company to repurchase up to ten percent (10%) of those new shares at the issue price, pursuant to the proposed scheme.
During the call option period, commencing on the restructuring effective date and ending on the third (3rd) anniversary, and subject to applicable laws and regulations, the investor will have the right (but not the obligation) to require each scheme creditor to sell up to ten percent (10%) of the new shares issued to that scheme creditor to the investor at a price equal to the issue price plus a five percent (5%) annualized return, or the company will have the right (but not the obligation) to repurchase up to ten percent (10%) of those new shares at a price equal to the issue price plus a five percent (5%) annualized return, pursuant to the proposed scheme.
As part of the proposed restructuring, an investor will inject high-quality assets and businesses into the group to improve its financial condition. Upon completion of the proposed restructuring, the company will, directly or indirectly, acquire the issued shares or assets of the target company and/or establish a joint venture with the target company.
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