China Asia Valley Group Limited entered into a subscription agreement for the private placement of an unsubordinated redeemable unsecured convertible bond at an issue price of HKD 353,360,000 for gross proceeds of HKD 353,360,000 on June 6, 2023. The transaction will include participation from new investors, Xuhong International Corporation for HKD 24,760,000, Zhongjun Holding Group Co., Ltd for 95,150,000 and individual investor, Huang for 233,450,000. The bonds shall bear interest at the rate of 3.6% per annum and computed on the basis of a 365-day year and the actual number of days elapsed in respect of the period from and including the issue date and including the maturity date, payable in arrears on the maturity date.

The bonds are convertible at an initial conversion price of HKD 0.10 per conversion share. The company will incur HKD 1,000,000 as issuance expenses. The transaction is subject to approval from independent shareholders at the extra-ordinary general meeting, Listing Committee of the stock exchange, all necessary approval(s) from the board(s) of directors, relevant government department(s), authority(ies), organisation(s) or any other third parties.

The maturity date is the date falling on the fifth anniversary of the issue date, or, if that is not a business day, the first business day thereafter. Unless redeemed, converted or purchased and cancelled before the maturity date, the convertible bond shall be redeemed at the principal amount plus accrued but unpaid interest on the maturity date.