GUMING (01364): Suggest issuing HKD1.96 billion zero coupon guaranteed convertible bonds and simultaneous share repurchase.

Guming (01364) announcement, dated June 23, 2026 (after trading hours), the company (as guarantor) and the issuer entered into a subscription agreement with the agent Goldman Sachs (Asia) LLC, under which the issuer conditionally agrees to issue bonds to the agent or as instructed by him, and the agent conditionally agrees to subscribe and pay, or cause to be subscribed and paid, the principal amount of HK$1.96 billion (equivalent to US$250 million) in bonds. The company has agreed to unconditionally and irrevocably guarantee the issuer's due payment under the bonds and trust deed, subject to compliance with various conditions set out in the subscription agreement. The issue price of the bonds will be 101% of the principal amount of the bonds, with a face value of HK$2 million per bond and denominations in multiples of HK$1 million beyond that. The initial conversion price is HK$23.54, representing a premium of approximately 15.50% over the stock price of HK$20.38 per share as of the subscription agreement date (June 23, 2026). Assuming full conversion of the bonds at the initial conversion price of HK$23.54 per share, the bonds will be convertible into approximately 83.2625 million shares, representing approximately 3.43% of the enlarged issued share capital of the company after the issue of the 83.2625 million convertible shares. It is expected that the bonds will be listed on the Vienna Stock Exchange. The company will apply for approval for the listing of the bonds on the Vienna Stock Exchange. The company will also apply to the Hong Kong Stock Exchange for approval for the listing and trading of the convertible shares. The net proceeds from the sale of the bonds (after deduction of commissions and other related expenses) will be approximately HK$1.9625 billion. The company intends to use the net proceeds from the sale of the bonds for (1) purchasing raw materials such as fresh fruits, fruit juice, and coffee beans in China and overseas, as well as purchasing equipment such as coffee machines in China and overseas, (2) optimizing capital structure, including repaying existing interest-bearing bank loans and other borrowings (including repayment of principal and payment of interest) and repurchasing shares (including but not limited to share buybacks), (3) investing in research and development to further enhance technology and improve digital business management and store operations, and (4) overseas expansion and general corporate purposes. As for the sale of the bonds, the agent recommends facilitating the sale of existing shares in the name of bond-related shares through a guaranteed short sale by professional investors (simultaneous Delta placement), and the company intends to purchase shares sold in the simultaneous Delta placement (simultaneous share repurchase). As part of the simultaneous Delta placement and simultaneous share repurchase, Goldman Sachs International (as borrower) entered into a share loan agreement with Modern Leaves Limited (as lender). The company expects to purchase 34.004 million shares at a price of HK$20.38 per share under the simultaneous share repurchase. The simultaneous Delta placement and simultaneous share repurchase are part of the bond issuance. The simultaneous Delta placement helps professional investors who subscribe to the bonds establish initial hedge positions, while the simultaneous share repurchase allows the company to absorb shares that these investors may potentially sell in the market as part of their hedging activities. It is expected that this will alleviate potential fluctuations in share prices and downward pressure, and support orderly market operation after bond pricing.