CTF Services to raise HK$850 million via convertible bonds

CTF Services (0659) plans to issue convertible bonds to raise HK$850 million, aiming to repurchase the bonds due this month and meet the minimum public float requirement.

The bonds carry an interest rate of 2.8 percent per annum. 

The net proceeds will be HK$843 million, of which HK$571 million will be used to synchronize repurchases and the balance will be used for general corporate purposes, according to the filing.

The initial conversion price is HK$7.67 per share, a premium of 2 percent over yesterday's closing price. 

Assuming full conversion, the bonds will be converted into a maximum of 110 million new shares, representing about 2.7 percent of the enlarged issued share capital.

The issuance of the bonds will enable CTF Services, previously known as NWS before being sold by New World Development (0017) to the parent Chow Tai Fook Enterprises in 2023, to restore the public float as required under the Listing Rules and to obtain additional funds for the Simultaneous Repurchase at a lower financing cost, according to the announcement.

It comes as a batch of convertible bonds involving HK$780 million at an interest rate of 4 percent per annum will be due on July 22, which CTF Services has proposed to repurchase with the proceeds from this fundraising.

Besides, CTF Services said it needs to fill a 0.82 percentage point gap in public float to meet the minimum requirement of 25 percent.

STAFF REPORTER