Rongsheng Heavy Plans $180 Mln Convertible Bond Issue

China Rongsheng Heavy Industries Group Holdings Limited, a large heavy industries group in China, announced that the Company has conditionally agreed to issue HK$1.4 billion 7.0% convertible bonds due 2016. The estimated net proceeds from the issue of the Convertible Bonds, after deduction of commissions and expenses, would be approximately HK$1.379 billion, which will be used for working capital and general corporate purposes, in particular, to support the Group’s strategic development in the offshore engineering business.

On 31 July 2013 (after trading hours), the Company as issuer, Mr. Zhang Zhi Rong as guarantor and a member of VMS Investment Group as subscriber entered into a Convertible Bonds Subscription Agreement. The initial Conversion Price is HK$1 per Share, which represents a premium of approximately 21.95% over the last closing price of HK$0.82 per Share quoted on the Stock Exchange on 31 July 2013; and a premium/ of approximately 21.07% to the average closing price of approximately HK$ HK$0.83 as quoted on the Stock Exchange for the five consecutive trading days up to and including 31 July 2013.

Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$1 per Share, the Convertible Bonds will be convertible into 1.4 billion Shares, representing approximately 20% of the issued share capital of the Company as at the date of this announcement and approximately 16.67% of the enlarged issued share capital of the Company.

The Board of the Company considers the Subscription Agreement to be part of the Company’s effort in attracting independent and significant shareholders who share its business vision and can add considerable value by bringing international best practices in business strategy and corporate governance. The issue of the Convertible Bonds also represents an opportunity to enlarge and diversify the shareholder base of the Company, to improve the liquidity position of the Group, to reduce the financing costs of the Group and to raise further capital for the Company in an aggregate net sum of approximately HK$1.379 billion. The Board currently intends that the funds will be used by the Company as mentioned above and consider that this will facilitate the overall development of the Group.

[mappress]

Source: rshi, August 1, 2013