GLOBAL NEW MAT (06616) proposes to issue convertible bonds with an aggregate principal amount of RMB1.3 billion at a premium of approximately 15.05% and concurrently redeem the 2026 convertible bonds.

GLOBAL NEW MAT (06616) announces that on September 17, 2026 (after trading hours), the Company entered into a subscription agreement with the managers, pursuant to which the Company has agreed to issue convertible bonds with an aggregate principal amount of RMB1.3 billion, and the managers have conditionally agreed, severally and not jointly, to subscribe for and pay for such convertible bonds, or to procure subscribers to subscribe for and pay for such convertible bonds, subject to the terms and conditions set out in the subscription agreement. The issue price of the convertible bonds will be 100% of the aggregate principal amount of the convertible bonds, and the denomination of each convertible bond will be RMB2 million, with amounts in excess thereof being in integral multiples of RMB1 million. The initial conversion price is HK$10.93 per share, representing a premium of approximately 15.05% over the closing price of HK$9.50 per share as quoted by the Stock Exchange on September 17, 2026 (being the trading day on which the subscription agreement was signed). Based on the initial conversion price of HK$10.93 per share, and assuming the convertible bonds are converted in full at the initial conversion price and no other shares are issued and no shares are repurchased, the convertible bonds will be convertible into approximately 139 million conversion shares, representing approximately 11.14% of the total number of issued shares as at the date of this announcement, and approximately 10.02% of the total number of issued shares as enlarged by the allotment and issue of the conversion shares. The conversion shares will be fully paid and will rank pari passu in all respects with the then issued shares. The estimated net proceeds are RMB1.281 billion (approximately HK$1.498 billion), and the net issue price per conversion share based on the initial conversion price is approximately HK$10.77. The Company intends to use the net proceeds to refinance existing indebtedness (including funding the concurrent repurchase), supplement working capital and for general corporate purposes, as detailed below. The net proceeds are expected to be fully utilized by around the end of the second quarter of 2027. This expected timeframe is the best estimate of the Directors and may vary depending on the future development, market conditions and business conditions of the Group. The details of the use of the net proceeds are as follows: (i) 95% of the net proceeds (approximately HK$1.423 billion) will be used to refinance the Group's existing indebtedness, including funding the concurrent repurchase and may include the redemption of convertible bonds previously issued by the Group. This use is intended to optimize the Group's capital structure, reduce finance costs and the contribution-to-income ratio, and enhance the Group's financial stability; and (ii) 5% of the net proceeds (approximately HK$74.9 million) will be used to supplement working capital and for general corporate purposes, including technology development and upgrades. Any specific deployment arrangements for such uses will be assessed by the Directors based on market conditions at the time and will be subject to approval by the Board. On September 17, 2026 (after trading hours), the Company and the transaction manager entered into a transaction manager agreement in respect of the concurrent repurchase, pursuant to which the transaction manager was appointed to, among other things, assist the Company in collecting indications of interest from holders of the 2026 convertible bonds who are willing to sell part or all of their 2026 convertible bonds to the Company. The repurchase price of the 2026 convertible bonds has been determined at 103% of the principal amount of the 2026 convertible bonds plus accrued interest. As at the date of this announcement, the Company has, through the transaction manager, received commitments from eligible bondholders to sell to the Company 2026 convertible bonds with an aggregate principal amount of approximately HK$990 million, and the remaining aggregate outstanding principal amount of the 2026 convertible bonds is approximately HK$10 million. The concurrent repurchase will be carried out concurrently with the issuance of the convertible bonds and will be completed on or around the date of issuance of the convertible bonds. Upon settlement of the concurrent repurchase, the repurchased 2026 convertible bonds will be cancelled. The concurrent repurchase will be funded by the net proceeds. The Board considers that the above repurchase of the 2026 convertible bonds will not have a material impact on the Company's financial position. The Board believes that the repurchase and the subsequent cancellation of the 2026 convertible bonds reflect the Company's confidence in its long-term business prospects and can also enhance returns to shareholders of the Company.