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Sinochem Hong Kong Holdings Issued HK$1.3 billion CB

Date:2006-08-02 Source:Sinochem Group

On July 20th, 2006, Sinochem Hong Kong Holdings (Stock Code: 0297) signed subscription contract to issue convertible bonds with the aggregate amount of HK$ 13,000,000,000. On July 21st, the issuance was completed. The issuance has won the enthusiastic response from the capital market to have 2 times of over subscription.

Sinochem Hong Kong Holdings is the listed branch of Sinochem Corporation featuring Sinochem's fertilizer business. It is China's biggest fertilizer importer, distributor and major producer. Sinochem employed Deutsche Banks as its financial advisor to operate the issuance. The convertible bond has zero coupons with the denomination of HK$ 10,000. Bondholders may exercise Conversion Rights at any time from 22 August 2006 up to the close of business on 23 July 2011 or the specific days before the Bonds shall have been called for any cause of redemption before the maturity Date. The initial conversion price of HK$3.74 represents a premium of 30% over the closing price on July 20th, 31% over the average of the closing price of the shares for the 5 trading days ended 20 July. It also represents a premium of 525.42% over the net assets value per share of HK$0.598 as at 31 December 2005. Since the bonds do not bear interest and the initial conversion price is of certain premium over the spot share price, insurance of the Convertible Bonds is instrumental both for the company as well as the shareholders. Sinochem Hong Kong Holdings has submitted the application of Convertible Bonds’ listing and trading to the Hong Kong Stock Exchange.

The issuance of Convertible Bonds is Sinochem's another successful maneuvering in overseas capital market since Sinochem Hong Kong Holdings' backdoor listing in July 2005. The enthusiasm of the investors reflects their optimism to Sinochem Hong Kong Holdings' performance and market value, and their confidence of the company's future development. Sinochem Hong Kong Holdings' investor team has been further expanded; the financial footing has been further solidified.