Hong Kong’s CTF Services to issue US$100 million in convertible bonds
The infrastructure unit under Chow Tai Fook Enterprises said it will apply to list the new shares on the Hong Kong exchange
The initial conversion price of HK$8.043 per share equates to a premium of around 5 per cent from CTF Services’ closing stock price on Wednesday. Upon conversion, the instrument will account for around 2.37 per cent of the company’s total issued share capital, according to a filing with the Hong Kong stock exchange.
The issuance is expected to generate HK$769 million in net proceeds, which the company said it would use to replenish working capital and settle principal and interest on bonds and loans, among other uses.
The company added that the issuance aims to help restore its public free float, which is currently at around 23.83 per cent, to meet the official 25 per cent minimum threshold.
“The directors consider the issue of the bonds as an appropriate initiative for the company to restore public float as required under the listing rules,” the filing said, adding that the bonds will help to improve “the company’s capital base as well as benefiting the long-term development of the company in the event that the bonds are converted into new shares”.
The bonds will be listed on the Vienna Stock Exchange. CTF Services said it would apply to list the new shares on the Hong Kong stock exchange. UBS and HSBC are the book runners on the deal.
