Maximum Total Net Proceeds is Approximately HK$113.6 Million
HONG KONG, CHINA - Media OutReach - 27December 2017 - Huazhang Technology Holding Limited ("Huazhang Technology" or the "Company" and its subsidiaries, together, the "Group", HKSE: 1673) is pleased to announce that, on 22 December 2017, the Company and the Joint Placing Agents entered into the Placing Agreement pursuant to which the Company had appointed the Joint Placing Agents as agents of the Company, to procure Placees on a best efforts basis to subscribe or purchase for a maximum of 14,000,000 Placing Shares at the Placing Price of HK$3.6 per Placing Share. On the same day (after trading hours), the Company and theFortune Ever Holdings Limited ("Subscriber") entered into the Subscription Agreement in relation to the issue of 18,056,000 Subscription Shares to the Subscriber at the Subscription Price of HK$3.6 per Subscription Share.
The Placing and Subscription Price of HK$3.6 represents a discount of approximately 4.8% to the closing price of HK$3.78 per Share on 22 December 2017, and a discount of approximately 5.0% to the average of the closing prices per Share for the five consecutive trading days prior to the date of the Subscription Agreement of approximately HK$3.79.
Joint Placing Agents of the Placing Agreement are Guotai Junan Securities (Hong Kong) Limited and Great Roc Capital Securities Limited. The Joint Placing Agents will place the Placing Shares to Placee(s) who and whose ultimate beneficial owners are Independent Third Parties. The maximum of 14,000,000 Placing Shares represent approximately 2.03% of the 690,683,681 issued shares of the Company as at the date of this announcement; The Subscriber of the Subscription Agreement is a company incorporated in British Virgin Islands with limited liability which is principally engaged in investment holding. The Subscription Shares to be allotted and issued under the Subscription Agreement represent approximately 2.61% of the existing issued share capital of the Company.
The maximum net proceeds from the Placing are approximately HK$48.6 million while the net proceeds from the Subscription are expected to be approximately HK$65.0 million. Assuming the maximum number of the Placing Shares is successfully placed under the Placing,the maximum total net proceeds of approximately HK$113.6 million are intended to be used for general working capital, the repayment of debts including that arising from the acquisition of the entire share capital in Fu An 777 Logistics Limited, and potential acquisitions of the Group.
Mr. Zhu Gen Rong, the chairman of Huazhang Technology Holding Limited, said, "the Directors consider that the proposed Placing and the Subscription would be a good opportunity to raise additional funds to strengthen its financial position and to broaden its shareholder base. The Placing Price, the Subscription Price, and the terms of the Placing Agreement and the Subscription Agreement are fair and reasonable. Thus, the Placing and the Subscription are in the interests of the Company and the Shareholders as a whole."
About Huazhang Technology Holding Limited
Huazhang Technology Holding Limited is an integrated service provider in paper-making industry and its principal business includes project contracting service, research and development, manufacture and sale of industrial automation systems, sludge treatment products and headbox, and after-sales and maintenance related services. The Group has been in the paper-making industry for over 16 years. The Group's self-manufacturing system and equipment are custom-built in accordance with the specifications and requirements provided by the Group's customers, which include various papermaking enterprises in the PRC. The group strives to become a leading solution provider and comprehensive service provider for the papermaking industry in the PRC.