China New Energy Ltd Convertible Loan Agreement (9092O)
04 February 2019 - 6:00PM
UK Regulatory
TIDMCNEL
RNS Number : 9092O
China New Energy Ltd
04 February 2019
4 February 2019
China New Energy Limited
(the "Company" or "CNE")
Entering of a Convertible Loan Agreement and Related Party
Transactions
The Board of CNE (AIM:CNEL), the AIM quoted engineering and
technology solutions provider to the bioenergy sector, announces
that it has entered into a binding convertible loan agreement ("the
Agreement") to raise a total of HKD11,500,000 (approximately
GBP1,118,000) before expenses.
On 17 December 2018, the Company advised that it was evaluating
whether a listing on another stock exchange may achieve a greater
valuation of the Company and also provide it with better access to
capital. The Company has concluded that this may be achieved by way
of a listing on a stock market in Asia and it has obtained a loan
from Double River Limited ("the Lender") for general corporate
purposes. At this stage, upon successful admission to a stock
market in Asia, it is considered that it may be beneficial for the
Company to withdraw its securities from trading on AIM
simultaneously with the new admission. It should be noted, however,
that the Company is at an early stage in its considerations and
there can be no certainty that an application will be made or, if
made, that any application for a listing in Asia will be
successful.
Terms of the Loan
Pursuant to the Agreement, Double River Limited, a company
registered in the British Virgin Islands, has agreed to provide a
loan for HKD11,500,000 (approximately GBP1,118,000) (the "Loan").
The Loan will be converted automatically into ordinary shares of
the Company at a price of approximately HKD0.481 (approximately 4.7
pence) per share on the Company obtaining regulatory approval from
the relevant authority for the new listing before the Maturity Date
(as defined herein below). The Loan has a term of 12 months from
the date the Company receives the sum of the Loan from the Lender
(the "Maturity Date"), and, in the event that the Loan is not
converted, carries an interest at a rate of 12 per cent. per annum
due on the Maturity Date. If the Loan is converted, no interest
will be applied.
Under the terms of the Agreement, directors of the Company, Mr
Yu Weijun and Mr Tang Zhaoxing, and a senior member of the
Company's management (a PDMR), Mr Jiang Xinchun, have given
personal guarantees in favour of the Lender in the event of the
Company's default. Certain restrictions on the issue of new shares
prior to the requisite regulatory approvals being obtained, or
repayment of the Loan, have also been requested by the Lender.
The Agreement further contains terms in line with standard
business practices.
The granting of the personal guarantees by Mr Yu Weijun and Mr
Tang Zhaoxing are considered to be related party transactions
pursuant to Rule 13 of the AIM Rules for Companies. Richard Bennet,
the sole independent director, considers, having consulted with the
Company's nominated adviser Cairn Financial Advisers LLP, that the
terms of the transactions are fair and reasonable insofar as its
shareholders are concerned.
As at the date of this announcement, the entire issued share
capital of the Company comprises 491,256,350 ordinary shares of
0.025 pence each which includes 46,808,809 ordinary shares held in
treasury.
Mr Yu, Chairman, commented, "This is an important step in the
continued growth of the Company and, if a rerating can be achieved
on an overseas market, it will create significant value for all
shareholders. It should further allow the Company better access to
growth funds and we look forward to updating shareholders further
as our considerations, and hopefully application, proceed".
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
China New Energy Limited
Ivy Xu xuhj@zkty.com.cn Tel: +86 20 8705
Richard Bennett 9371
rbennett@zkty.com.cn Tel: +44 7966
388374
Cairn Financial Advisers LLP Tel: +44 20 7213 0880
(Nomad)
Jo Turner / Sandy Jamieson
Daniel Stewart and Company Tel: +44 20 7776 6550
(Broker)
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of this information may apply. For further information, please
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END
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