CTF SERVICES (00659) plans to issue 850 million Hong Kong dollars of 2.8% convertible bonds.

CTF SERVICES (00659) announced that it is recommending a simultaneous repurchase of 780 million HKD 4.00% convertible bonds due in 2025. On July 10, 2025, the exclusive transaction agent entered into a transaction agent agreement with the company. Under this agreement, the exclusive transaction agent has been appointed to assist the company in gathering intentions from existing convertible bond holders who may be willing to sell their existing convertible bonds to the company. Qualified bondholders who accept the invitation to sell their existing convertible bonds will receive the repurchase price equal to 100% of the principal amount of the existing convertible bonds offered for repurchase, along with accrued but unpaid interest on the existing convertible bonds. As of the date of this announcement, the company has received commitments from qualified bondholders to sell approximately 566 million HKD of existing convertible bonds to the company, with the remaining outstanding principal amount of the existing convertible bonds being approximately 74 million HKD. It is proposed to issue 850 million HKD 2.80% convertible bonds due in 2027. On July 10, 2025, the company entered into a subscription agreement with the joint bookrunners. Pursuant to the terms and conditions of the subscription agreement, the joint bookrunners have conditionally and individually (not jointly or jointly and severally) agreed to subscribe for or procure subscriptions for and pay the company the total principal amount of 850 million HKD of bonds. The issue price of the bonds will be 100% of the principal amount, with each bond having a face value of 2,000,000 HKD and its multiples. Based on the initial conversion price of 7.67 HKD per share and assuming full conversion at the initial conversion price, the bonds can be converted into a maximum of 110.8 million new shares, representing approximately 2.686% of the enlarged share capital of the company after the issuance of new shares upon full conversion of the bonds. The company believes that the issuance of bonds is an appropriate measure to restore the public shareholding level required under the listing rules. In addition, the issuance of bonds can bring other benefits, such as providing additional funds for the repurchase at a lower financing cost, with the balance used for general corporate purposes; no immediate dilution impact on existing shareholders' equity; and if the bonds are converted into new shares, it will strengthen the company's capital base and benefit the company's long-term development. The net proceeds are expected to be approximately 843 million HKD. The company intends to use the net proceeds from the issuance of bonds as follows: approximately 571 million HKD for the repurchase of bonds and the remaining balance for the company's general corporate purposes.