Yanchang Petroleum International to Issue US$60 Million Two-year Convertible Bonds at 6% Coupon Rate to Yanchang Petroleum Group

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A Vote of Confidence from Parent Company


Transaction Highlights

  1. Yanchang Petroleum International has received independent shareholder approval for issuing a USD60 million two-year convertible bonds to its parent group Yanchang Petroleum Group at a coupon rate of 6% p.a. The CB represents a vote of confidence of the parent group towards the Company’s development potential and is an affirmation of the Company’s position as an international listed mergers and acquisitions platform of the parent group;
  2. The net proceeds, amounting to HK$469.9 million, will be applied to redeem an existing CB and injected as working capital to the Company’s operations in Canada for development and expansion needs;
  3. The Company’s financing costs will be substantially reduced after replacing the existing 10% coupon rate CB with the new CB at 6%;
  4. The Company has been identifying mergers and acquisitions opportunities in Canada and along the Belt and Road region to expand its scale of operation and business footprint.

HONG KONG, CHINA – Media OutReach – November 26, 2018 – Yanchang Petroleum International Limited (“Yanchang Petroleum International” or the “Company”; stock code: 00346), is pleased to announce that its independent shareholders approved the issuance of convertible bonds (the “CB”) to its controlling shareholder Shaanxi Yanchang Petroleum (Group) Co., Ltd (“Yanchang Petroleum Group”) at a Special General Meeting held on 23 November 2018.

The US$60 million CB has a two-year maturity, bearing 6% interest per annum and a conversion price of HK$0.076 per share. If fully converted, the parent company’s shareholding will increase from 53.5% to 68.9%.

The net proceeds will be used for the repayment of an existing CB and as working capital for the oil producing activities in Canada. This will substantially reduce the Company’s financing cost as the coupon rate is reduced by a considerable 4% p.a..

Mr. Li Yi, Chairman and Executive Director of Yanchang Petroleum International, commented, “We are pleased with the unwavering support that our parent group Yanchang Petroleum Group has offered us. It affirms the Company’s strategic position as the parent group’s international listed acquisition platform. The CB will provide new capital to establish a solid funding base for the Company to achieve improved business performance and future expansion.”

Mr. Bruno Deruyck, Chief Executive Officer and Executive Director of Yanchang Petroleum International said, “The new CB not only substantially lowers our financing costs, but also enable us to inject capital to support the growth of our Novus operation. It also represents a vote of confidence from our parent group towards our business strategy and prospect. Looking forward, we will continue to seek new mergers and acquisitions opportunities in both Belt and Road region and Canada to further expand our business footprint and achieve better economies of scale.”


About Yanchang Petroleum International (stock code: 00346)

Yanchang Petroleum International is principally engaged in the following activities (i) exploration, exploitation and operation of oil and gas; and (ii) fuel oil trading and distribution. In its upstream operations, Yanchang Petroleum International possesses operating oilfields in Saskatchewan and Alberta, Canada, through its wholly owned subsidiary Novus, a Canadian enterprise. Novus engages in the business of acquiring, exploring for, developing and producing crude oil and natural gas. In its downstream operations, Yanchang Petroleum International is principally engaged in wholesale, retail, storage and transportation of oil products through its 70% owned subsidiary, Henan Yanchang Petroleum Sales Co., Limited, and which has been granted valid licenses for distribution and sales of oil products in China.

For details, please refer to http://www.yanchanginternational.com

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