According to the Zhitong Finance App, China Xinhua TV (08356) and the offender Shunleetat (BVI) Limited jointly announced that on September 5, 2023, Jian Guoxiang and the seller China Xinhua News Television Network Co., Ltd. entered into a legally binding clause stipulating (including) the main terms and conditions of the sale agreement and share subscription agreement; proposed revisions to the terms of the existing convertible bond; and the terms of convertible bond A and convertible bond B. The directors believe that the new capital provided by the share subscription will resolve the company's liquidity problems, and that the proposed transactions under the terms and conditions will meet the interests and long-term interests of all stakeholders.

According to the terms and conditions, the seller will sell approximately 1,1886 million shares of the company to Jian Guoxiang, equivalent to about 29.3% of the company's total issued share capital at the date of this joint announcement. The total cost is approximately HK$16.6407 million, which is equivalent to HK$0.014 per share to be sold. Acquisitions and share subscriptions are not mutually conditional.

According to the terms and conditions, the company has agreed to issue a total of about 1,667 billion subscription shares to Jian Guoxiang. The share subscription price is HK$0.012 per subscribed share, at a total cost of HK$20 million. The net proceeds of approximately HK$19.9 million are intended to be used to repay the Group's outstanding debts and to be used as the Group's general working capital.

As a prerequisite to completing the share subscription agreement, the company must enter into a fifth supplementary agreement with the seller to amend certain terms of the existing convertible bonds; issue a convertible bond A with a capital amount of approximately HK$64,1279 million to the seller to offset interest on the overdue existing convertible bonds; and issue a convertible bond B with a capital amount of HK$16.24 million to offset the portion of the outstanding seller (as a group service provider) that has not paid broadcast fees.

Since only the share subscription was completed, Jian Guoxiang will have an interest in approximately 1,736 billion shares. Assuming that the company's issued share capital (other than allotted and issued subscription shares) has not changed between the date of this joint announcement and the completion of the share subscription matters, it is equivalent to about 30.3% of the issued share capital after expanding the allocation and issuance of approximately 1,667 billion subscribed shares. According to Rule 26.1 of the Takeovers Code, Jian Guoxiang is required to submit a share offer only after the share subscription is completed.

The offeror is wholly and beneficially owned by Jian Guoxiang, and a share offer will be submitted in this regard. HK$0.014 in cash per share of the offer is approximately 16.67% premium over the closing price of HK$0.012 per share reported on the Stock Exchange on the last trading day.

As both the acquisition and share subscription matters have been completed, Jian Guoxiang's shareholding will increase to approximately 2,924 million shares. Assuming that the company's issued share capital (other than allotting and issuing subscription shares) does not change from the date of this joint announcement to the completion of the share subscription, it is equivalent to about 51.1% of the issued share capital expanded through allotment and issuance of approximately 1,667 billion subscription shares. At that time, acceptance of share offers will be unconditional.