Last checked at 23 Sep 2010 10:30
23 September 2010
GREEN DRAGON GAS LTD
("Green Dragon Gas" or "the Company")
USD $50m Convertible Bond at USD $9.10 per share to Ontario Teachers' Pension Plan Board
Green Dragon Gas Ltd. (AIM:GDG), one of the largest independent companies involved in the production of CBM gas and the distribution and sale of wholesale gas in China, is pleased to announce that it has raised USD $50m through the issuance of a Convertible Bond ('Bond') to funds managed by Ontario Teachers' Pension Plan Board (OTPPB) . The Bond has a 7% coupon and a final maturity date of 7 June 2015. The Bond is convertible into ordinary shares at a conversion price of USD $9.10 per share, representing a 29% premium to the closing price of 22 September 2010.
The Company intends to use the net proceeds from the capital to drill directional SIS wells, expand its gas sales and distribution infrastructure including CNG retail stations, wholesale gas distribution station capacity in line with its 2010 targets and for working capital. The Company has identified opportunities that currently exist in the sale and distribution of gas synergistic to the on-line CBM production of its upstream division.
The Company has the right on the third anniversary of the issue date and onwards to call the Bond at the principal amount if the Company's share price exceeds 130% of the conversion price (or USD $11.83) over a defined period. The bondholders have the right to put the Bond to the Company, in the event that the Company hasn't called the convertible bonds, on the third anniversary of the issue date at a redemption price of 100% of the principal amount.
The Company has agreed to list this Bond along with the previously issued identical bond to GLG Partners in a single $100 million bond listing within the Euro MTF market in Luxembourg.
With C$96.4 billion in net assets at December 31, 2009, OTPPB is the largest single-profession pension plan in Canada. OTPPB is an independent organization that invests the pension fund's assets and administers the pensions of 289,000 active and retired teachers in Ontario.
Randeep S. Grewal, CEO and Founder, commented:
"We are very delighted with the addition of Ontario Teachers' Pension Plan Board as a stakeholder and look forward to them becoming a long term shareholder of the Company. By investing in the Company through a convertible bond with a 29% conversion premium, OTPPB reconfirms the inherent value within Green Dragon Gas that has yet to be recognized by the capital market at large. As an aligned shareholder, it is my strong belief that Green Dragon Gas has historically issued equity that has demonstrated accretive asset value to existing shareholders following the dilution from any equity issuance.
"This issuance will be followed with additional announcements by the company that are demonstrative of such accretion. The investment is at a 29% premium to market; the use of capital will provide us additional assurance of attaining optimum value for our commercial gas sales to the market in the long term and complies with our 2010 objectives of establishing a distribution network.
The upstream asset base continues to perform in line with out expectations. More successful SIS wells have been drilled according to plan and placed on-line. We are now focused on fine tuning our drilling efficiency so as to enable SIS drilling at our Shizhuang South (GSS) Block in 2011 and beyond.
The Company's significant midstream and downstream assets ought to become better appreciated and understood in the coming months by the market. There are considerable niche and synergistic opportunities available to us in China which we are actively pursuing to unlock our inherent value."
For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact:
| Stephen Hill , VP Corporate Communications Green Dragon Gas | +852 3710 0168 |
| Dr Azhic Basirov / David Jones Nomad & Broker, Smith &Williamson | +44 20 7131 4000 |
| Robert Collins, Tim Redfern Broker, Evolution Securities | +44 20 7071 4312 |
| Judith Rawnsley Broker, CLSA | +852 2600 8203 |
| James Henderson, Phillip Dennis Investor Relations, Pelham Bell Pottinger | +44 20 7861 3232
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