Zhithong Financial APP News, Shengneng Group (02459) announced that on September 30, 2024, the company, the old-first-new-later seller (Otautahi Capital Inc.), and the placement agent entered into a placement and subscription agreement. The old-first-new-later seller agreed to sell, and the placement agent, as the placement agent of the old-first-new-later seller, agreed to use its best efforts to induce no fewer than 6 placing persons (who and their ultimate beneficial owners will be independent third parties) to purchase up to 80 million shares held by the old-first-new-later seller, at a placement price of HKD 0.39 per share; and the old-first-new-later seller conditionally agreed to subscribe, while the company conditionally agreed to issue new shares equivalent to the actual number of placement shares placed by the seller, at a subscription price of HKD 0.39 per share (same as the placement price).

The maximum number of placement shares will be equal to the number of subscription shares, equivalent to approximately 7.02% of the total issued shares of the company after the enlarged subscription shares (assuming the placement shares are fully placed, and except for the subscription shares to be placed and issued, there is no change in the total issued shares of the company from the date of this announcement to the completion date of the placement and subscription matters). The placement price of HKD 0.39 per placement share represents a discount of approximately 19.6% from the closing price of HKD 0.485 per share on the Stock Exchange on September 30.

Assuming full placement of placement shares, the net proceeds of the subscription matter (after deducting all relevant expenses, costs, and expenses to be borne or incurred by the company) are expected to be approximately HKD 30.7 million. Approximately 50% of the net proceeds of the subscription matter will be used for the development of graphite electrode business, including but not limited to purchasing raw materials and/or graphite electrodes, paying subcontracting and conversion costs, other operational and indirect costs, and upgrading production facilities, and approximately 50% will be used to supplement working capital and for general corporate purposes.