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New Heritage issues HK$75mn convertible notes

The notes, with 6% per annum interest, further enhances the developer’s financial Position and flexibility for future business development.

At the extraordinary general meeting held on Friday, New Heritage Holdings Ltd. (“New Heritage”), a Hong Kong based developer of middle to high-end property projects in Suzhou, Jiangsu Province and an investor in commercial properties in Beijing, the PRC, has secured approval from shareholders to issue convertible notes with an aggregate principal amount of HK$75 million due in 2014.

Pursuant to the subscription agreement dated 5 July 2011, the Group will issue notes to Asia Financial Holdings Limited and Asia Insurance Company, Limited convertible into shares at a conversion price of HK$1.10 per share. The maximum number of the Conversion Shares to be issued is 68,181,818 shares, representing approximately 5.06% of the issued share capital as enlarged by the Conversion Shares. Interest rate of the Convertible Notes is 6% per annum. After deducting relevant expenses, the net proceeds are expected to be approximately HK$74 million, allowing the Group to refinance its debts under the 2007 Convertible Notes and have a long term duration for three years to 2014, accoridng to a New Heritage report.

Mr. Richard Tao, Vice Chairman of New Heritage, said, “We are very pleased to have shareholders’ support for the issue of convertible notes. Given the current unstable capital market due to various sovereign debt crisis in Europe and continuous credit tightening in the PRC, we are pleased to receive shareholders’ consent on our proposal to issue this convertible note at an acceptable interest rate.”

Mr. Paul Tao, Managing Director of New Heritage, said, “Issuing these convertible notes would enhance the Group’s financial position and flexibility for further business development in the near future. Looking ahead, we will continue to focus on second-tier cities that that possess great growth potential and actively explore good development prospects.”

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