ZHI SHENG GP plans to issue convertible bonds with a total principal amount of up to HKD 20 million

According to the announcement from ZHI SHENG GP (08370), on June 19, 2025, the company (as the grantee) entered into a subscription option deed with the grantor (as the grantor) at a cost of HKD 1.00. The grantor has agreed to grant the company (or its designated company) a subscription option to acquire all option shares and transfer shareholder loans. The subscription option can be exercised at any time during the exercise period (i.e., a period of six months from the date of the subscription option deed or a later date agreed upon in writing by both parties) at the company's sole discretion to purchase option shares and shareholder loans at the option purchase price.

Upon signing the subscription option deed, the company must pay a total of HKD 19.1 million as a refundable deposit, which will be used to pay part of the option purchase price if the subscription option is exercised. If the conditions precedent set out in the subscription option deed are not met or waived (as applicable) by 4:00 PM on the final deadline, or if the subscription option notice is not issued after the exercise period expires, or if the transfer of option shares and the allocation of shareholder loans (if any) cannot be completed for any reason after exercising the subscription option, or if the subscription option deed is terminated according to its terms (whichever is earlier), the company has the right to issue a written termination notice to the grantor, and the grantor must fully refund the deposit to the company (or as directed) without interest within 30 business days from the date of the termination notice.

On June 19, 2025, the company entered into a placing agreement with the placing agent, which conditionally agreed to act as the company's placing agent during the placing period, using its best efforts to facilitate the subscription of no less than 6 placees for a total principal amount of up to HKD 20 million of convertible bonds.

Assuming the conversion rights are fully exercised at the initial conversion price of HKD 6.4 per share (subject to adjustment), the company will issue up to 3.125 million conversion shares, accounting for approximately 2.03% of the total issued shares as of the date of this announcement; and the total issued shares after the issuance of 3.125 million conversion shares will be approximately 1.99% (assuming there are no changes in the company's issued share capital from the date of this announcement until the date of full conversion of the convertible bonds).

The initial conversion price of HKD 6.4 per share represents a premium of approximately 10.15% over the closing price of HKD 5.81 per share reported on the Stock Exchange on the date of the placing agreement; and a premium of approximately 12.28% over the average closing price of HKD 5.7 per share reported on the Stock Exchange during the five consecutive trading days immediately preceding the date of the placing agreement.

Assuming all convertible bonds are successfully placed by the placing agent, the maximum total proceeds from the placing will be HKD 20 million, and the net proceeds from the placing (after deducting placing commissions and other related expenses) will be approximately HKD 19.1 million. The company intends to use all net proceeds to pay the refundable deposit