4th Feb 2019 09:37
LONDON (Alliance News) - China New Energy Ltd on Monday said it has entered into a binding convertible loan agreement to raise a total of HKD11.5 million, about GBP1.1 million, before expenses, as part of an effort that may see it give up its London listing.
Since mid-December, China New Energy has been 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.
On Monday, the AIM-listed engineering and technology solutions provider said it 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 Ltd to carry out the work required and for general corporate purposes.
China New Energy said it may be beneficial for the company to withdraw its securities from trading on AIM simultaneously with the new admission.
Pursuant to the agreement, Double River Ltd has agreed to provide a HKD11.5 million, which will be automatically converted into ordinary shares of China New Energy at a price of HKD0.481 per share, about 4.7 pence.
China New Energy shares on AIM were trading 18% higher on Monday at 1.32p each.
The loan has a term of 12 months, the company said, and, in the event that it is not converted, carries an interest at a rate of 12% per annum. If the loan is converted, no interest will be applied.
"This is an important step in the continued growth of the company and, if a re-rating can be achieved on an overseas market, it will create significant value for all shareholders," said Chair Yu Weijun.
"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," added Weijun.
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