Sage Capital vehicle backs Chinese shoemaker Baofeng

Asia Equity Value will subscribe to convertible notes issued by Baofeng worth HK$176 million ($22.7 million) and valid for three years. According to a filing at the Hong Kong Stock Exchange, the initial conversion price is HK$1.31 per share, which represents a 13% premium to the company's morning closing price.

Baofeng will also issue warrants to Asia Equity Value, permitting the investor to subscribe to 62,026,431 shares at HK$1.53 apiece.

Assuming full conversion of the convertible notes and full exercise of the warrants, Asia Equity Value would hold 19.72% of the company's existing issued share capital and 16.47% of its enlarged share capital following conversion of the notes and warrants.

The funding is expected to support Baofeng's business expansion, including the construction of another industrial plant, which is scheduled to commence in 2013. The capital will also be used to develop the company's retail business by establishing multi-brand flagship stores in first-tier cities as well as a new headquarters in Quanzhou, Fujian Province.

"The funding we received from Sage Capital will not only provide us with an even stronger financial position to cope with our rapidly expanding business, but also enhance our competitiveness in the market," said Qingwei Chen, CEO and executive director of Baofeng.

 

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• Topics
• Greater China
• Consumer
• Expansion
• Consumer
• China
• Growth capital