Last checked at 8 Jun 2010 15:29
8 June 2010
GREEN DRAGON GAS LTD
("Green Dragon" or "the Company")
USD $50m Convertible Bond at USD $9.10 per share, a 56% premium
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 GLG Partners LP and its co-investors. The Bond holds 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 56% premium to the closing price of 7 June 2010.
The Company intends to use the net proceeds from the capital to expand its rig capability to drill directional SIS wells, expand its gas sales and distribution infrastructure including CNG retail stations, expand gas distribution pipelines 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 Convertible 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 Convertible 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.
Nomura Securities and Credit Suisse acted as co-agents in the Convertible Bond placing.
Randeep S. Grewal, CEO and Founder, commented:
"Green Dragon has continued to make very significant progress since announcing financial results in March. As an aligned shareholder it is my strong belief that GDG has historically issued equity that has demonstrated accretive asset value to shareholders following the related dilution. This issuance is cut from that cloth. The dilution is at a 56% premium to market, the use of capital enables commercial gas sales to the market and complies to our 2010 objectives.
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. The expansion to the number of rigs capable of drilling SIS wells is demonstrative of our confidence in the current drilling and production performance. We are now focused on fine tuning our drilling efficiency so as to enable SIS drilling at our Shizhuang South Block as a manufacturing process.
The Company's significant midstream and downstream assets will become better understood in the coming months. There are considerable opportunities available to us in China which we are actively pursuing to unlock the inherent value that we believe GDG offers to its shareholders which the markets currently has not appreciated and valued."
For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact:
| Stephen Hill / Betty Cheung 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 |
| Nick Morgan Broker, GMP Securities
| +44 20 7647 2800 |
| James Henderson, Phillip Dennis Investor Relations, Pelham Bell Pottinger | +44 20 7861 3232
|