Zhitong Finance App News, China's Sandi (00910) issued an announcement. On January 30, 2024, the company signed a convertible bond amendment agreement with Primary Partner. The company and Primary Partner have conditionally agreed to amend the terms and conditions of the convertible bond, so that: the principal amount of the convertible bond will be changed from HK$500 million to HK$300 million; the maturity date will be changed from January 30, 2024 to January 30, 2029; the annual interest rate will be changed from 1% to 2%; Primary Partner has the right The company is required to redeem all outstanding convertible bonds; and the conversion price of the convertible bonds will be changed from HK$0.412 to HK$0.090 per converted share. The Convertible Bond Amendment Deed will be effective retroactively from January 30, 2024, subject to the fulfillment of certain preconditions. With the exception of the proposed amendments to the convertible bonds, all other terms and conditions of the convertible bonds will remain unchanged.

On January 30, 2024, the Company and Primary Partner entered into an acceptance note amendment agreement. The Company and Primary Partner have agreed to amend the terms of the acceptance note so that: the principal amount of the acceptance note will be changed from HK$600 million to HK$800 million; the maturity date will be changed from January 30, 2024 to January 30, 2029; the annual interest rate for the sixth to tenth year after November 30, 2019 will remain 6%; and the Primary Partner has the right to require the company to redeem all or part of the acceptance note. The acceptance note amendment agreement takes effect on the date of the acceptance note amendment agreement. Other than the amendments to the acceptance note described above, all other terms of the acceptance note will remain unchanged.

Unless extended, the convertible bonds will expire on January 30, 2024. As of the date of this announcement, the convertible bonds have not been fully or partially redeemed or converted. If the Company redeems all of the convertible bonds on the date of this announcement, the Company's expected cash outflow will be approximately HK$506 million. After considering the direct and immediate negative impact of full redemption of the convertible bonds on the company's liquidity and financial situation, the Company has consulted with Primary Partner to explore possible solutions, including but not limited to the possibility of extending the maturity date of the convertible bonds, and making certain adjustments to the existing terms.

Considering that the principal amount of the acceptance note should be increased by HK$200 million in accordance with the amendment of the acceptance note, the principal amount of the convertible bond should be reduced accordingly to keep the total principal amount of the convertible bond and the acceptance note the same. Since the current conversion price of convertible bonds is much higher than the current market price of the shares, the revised conversion price will be used as a reward for the primary partner to exercise the conversion rights attached to the convertible bonds to convert the convertible bonds, thereby reducing the financial pressure on the company to repay the convertible bonds at maturity and helping the company obtain alternative sources of funding to improve the company's financial situation. Furthermore, although the annual interest rate on convertible bonds should be raised to 2% in accordance with the proposed revisions to convertible bonds, the interest rate is still relatively low. According to the revised terms of the convertible bonds (as amended and amended by the Convertible Bond Amendment Deed), the early redemption rights initially granted to the Company will remain unchanged, and Primary Partner will have the right to require the Company to redeem all unexercised convertible bonds before the maturity date of the convertible bonds. Following fair negotiations between the contracting parties, this early redemption right (an important part of the proposed amendments to the convertible bonds) was granted to the Primary Partner in exchange for extending the maturity date of the convertible bonds by five years.

In this regard, the directors believe that the proposed amendments to convertible bonds will enable the Group to continue to refinance its debts under convertible bonds under normal commercial terms and enable the company to maintain flexibility in deploying its capital as general working capital, which is critical to the company's operations in a challenging market environment.

The company believes that the proposed revisions to convertible bonds will give the Group more time to develop its business rather than fully repay the convertible bonds within a relatively short period of time. The proposed revisions to the convertible bonds are based on fair negotiations between the Company and Primary Partner after reference to the company's past performance; the company's current financial and cash situation, the current market price of the shares, and recent market conditions.