Gelonghui, May 19?$rare Beauty Resources (09936.HK) $It is announced that on May 19, 2022, the company, the subscriber and China Galaxy entered into a framework subscription agreement, based on whichThe subscribers intend to subscribe and the Company intends to allot and issue 60 million new shares at the proposed subscription price of HK $4.00 per proposed subscription share.The framework subscription agreement is legally binding and sets out the intention of the company and the subscribers in respect of the proposed subscription. Under the framework subscription agreement, upon approval of the registration of foreign direct investment by the subscriber, the company and China Galaxy shall enter into an enforcement agreement, which is expected to set out the detailed terms for the implementation of the proposed subscription, including, but not limited to, reimbursement details and procedures for completing the proposed subscription.
The proposed subscription shares account for 20.0% of the company's existing issued share capital as at the date of the announcement. Upon completion of the proposed subscription, the proposed subscription shares will account for approximately 16.7% of the issued share capital of the company at that time after the proposed subscription shares have been expanded. The proposed subscription price of HK $4.0 is about 9.7% off the closing price on May 19, 2022.
It is reported that the subscriber GFL Investment (Hong Kong) Limited is a limited liability company incorporated in Hong Kong and an independent third party. It is an investment holding company and is an indirect wholly-owned subsidiary of Ganfeng Lithium. Ganfeng Lithium is mainly engaged in the production of lithium hydroxide, lithium compounds, lithium fluoride and butyl lithium; production, processing and sales of non-ferrous metals, batteries, instrument parts, machinery and equipment, chemical products, chemical raw materials and chemical products.
The directors are of the view that the proposed subscription provides an opportunity for the company to raise funds and at the same time expands the company's shareholder base. In addition, as Ganfeng Lithium is the world's leading lithium ecological enterprise, the proposed subscription will produce synergy and complementary advantages in mineral resources, non-ferrous metal smelting and processing and downstream customer resources. It is expected that the proposed subscription will promote the development of the Group's tantalum and niobium business and enhance the overall competitiveness of the Group.
The net proceeds from the proposed subscription are intended to be used for the Group's fixed asset investment and general working capital purposes.