HONG KONG, Feb. 18 /Xinhua-PRNewswire/ -- Country Garden Holdings Company Limited ("Country Garden" or the "Company"; HKEx: 2007), one of the leading integrated property developers in the PRC, announced that the Company has entered into a Subscription Agreement (the "Agreement") with Merrill Lynch (Singapore) as the Sole Global Coordinator, Sole Bookrunner for the issuance and subscription of US Dollar Settled, RMB Denominated Convertible Bonds due 2013 with an initial aggregate principal amount of RMB3,595 million (equivalent to approximately HK$3,899 million).
Concurrently with the execution of the Agreement, the Company entered into a Cash-Settled Share Swap Transaction (the "Equity Swap") with Merrill Lynch International as the Sole Counterparty for shares of up to a value of US$250 million (equivalent to approximately HK$1,950 million). Conditional upon the Company maintaining its minimum free float as required by the Listing Rules and subject to market conditions and compliance with relevant law, the Company intends to repurchase shares in the open market in the future. The Equity Swap hedges the Company against changes in its share price from current levels. Taken together and assuming the current share price remains stable, the Equity Swap and the intended future repurchases of shares will reduce the potential dilution upon future conversions of the Bonds by reducing the net issuance proceeds and the net number of shares issueable upon full conversion of the Bonds, thereby increasing the effective issue price per new Share, if the Bonds are converted, to approximately HK$14.
The net proceeds from the issue, excluding cash collateral for the Equity Swap and the fees and expenses incurred in relation to the transaction, will be for the repayment of the Company's existing debt obligations, funding property projects and for general corporate purposes.
With this highly successful, innovative strategic financing transaction, the Company has further broadened its global investor base. The transaction enables Country Garden to raise financing at an attractive cost while achieving an effective share issuance price of about HK$14 per new share when the Bonds convert. The Company's intention to conduct a physical share repurchase in the future also demonstrates its confidence in its prospects.
Ms. Estella Ng, Chief Financial Officer of Country Garden, added, "The transaction enables us to pro-actively manage our capital structure and provides us with financial flexibility for further expansion of our business."
Ms. Ng continued, "Our business continued to perform strongly. The Company's property sales during the 10 days Chinese New Year period was highly satisfactory, with total sales of approximately RMB850 million, of which approximately RMB280 million was accounted for by the Country Garden Phoenix City Project."
Trading of the Company's shares was suspended from February 15, 2008, 2:30 pm, pending on the Company's application to the Stock Exchange of Hong Kong Limited for the resumption of trading on February 18, 2008.
* Assuming the current share prices remain stable
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Neither this press release nor any copy hereof may be taken into or distributed in the United States. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offer of securities is to be made by Country Garden Holdings Company Limited in the United States.
For further information, please contact
iPR Ogilvy Ltd.
Callis Lau/ Crystal Chan
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Fax: +852-3170-6606
Email: callis.lau@iprogilvy.com/ crystal.chan@iprogilvy.com
