E&P Global (01142) plans to issue approximately 459 million shares and 1.16 billion shares at a premium of about 59.4% and about 117.4% respectively to capitalize on debt.

E&P GLOBAL (01142) announced that on June 27, 2026, the company entered into a subscription agreement with the subscriber regarding the debt capitalization as follows: (i) The company conditionally agreed to issue and allot, and the subscriber conditionally agreed to subscribe for a total of 455 million shares at a subscription price of HK$0.11 per share for the first subscription, in accordance with the general mandate, to settle a portion of the loan with an interest rate of up to HK$50 million; and (ii) The company conditionally agreed to issue and allot, and the subscriber conditionally agreed to subscribe for up to 1.16 billion shares (i.e. the maximum number of shares for the second subscription) at a subscription price of HK$0.15 per share, in accordance with the special mandate, to settle the remaining debt. The total consideration payable for the first subscription and the second subscription will be fully settled by way of set-off, by offsetting the outstanding loan (principal of approximately HK$177 million) and all accrued interest payable up to the completion date of the second subscription, being the company's debt to the subscriber. As of the announcement date, the company has issued 12.637 billion shares. Assuming no changes in the number of shares issued between the announcement date and the completion date of the first subscription, the first subscription shares represent approximately 3.60% of the company's existing issued share capital as at the announcement date, and approximately 3.47% of the company's issued share capital after the first subscription shares are issued and allotted. The face value of the first subscription shares is approximately HK$45 million. The subscription price of HK$0.11 per share for the first subscription shares represents a premium of approximately 59.4% over the closing price of HK$0.069 per share on the last trading day on the Stock Exchange. As of the announcement date, the company has issued 12.637 billion shares. Assuming no changes in the number of shares issued between the announcement date and the completion date of the second subscription (excluding the first subscription), the maximum number of second subscription shares of 1.16 billion shares represents (i) approximately 9.18% of the company's existing issued share capital as at the announcement date; (ii) approximately 8.86% of the company's issued share capital after the first subscription shares are issued and allotted; and (iii) approximately 8.14% of the companys issued share capital after the first subscription shares and the maximum number of second subscription shares are issued and allotted. The face value of the maximum number of second subscription shares and the total face value of the first subscription shares and the maximum number of second subscription shares are approximately HK$116 million and approximately HK$161 million, respectively. The subscription price of HK$0.15 per share for the second subscription shares represents a premium of approximately 117.4% over the closing price of HK$0.069 per share on the last trading day on the Stock Exchange. The company will apply to the Stock Exchange Listing Committee for approval to list and trade the first subscription shares and the second subscription shares. As disclosed in the company's interim report for the six months ended September 30, 2025, the company's cash and cash equivalents as of September 30, 2025 were approximately HK$3 million, while the group recorded a net current liability of approximately HK$9.7 million. As of September 30, 2025, the group's current ratio was 59.40%, and the debt to equity ratio (calculated by dividing interest-bearing borrowings by total assets) was approximately 109.24%. Taking into consideration the group's liquidity position and financial condition, the directors believe that debt capitalization will enable the group to fully settle the outstanding loans without utilizing the group's limited cash resources, thereby avoiding significant cash outflows. The directors also believe that debt capitalization will help lower the group's overall debt level, improve its financial position, preserve liquidity, and strengthen the group's working capital base. Furthermore, as the first subscription shares and the second subscription shares will be issued at a premium to the recent market closing price, the portion of the issuance price exceeding the face value of the shares will be credited to the company's share premium account, thereby enhancing its net asset position without additional cash outlay.