Changyou Alliance Group Limited (SEHK:1039) announced that it has entered into a subscription agreement with returning investor Chance Talent Management Limited for a private placement of convertible bonds for gross proceeds of HKD 126,000,000 on July 29, 2020. The bonds will be issued at par, will bear fixed interest at a rate of 3.5% per annum, payable semi-annually in arrears, are due on the date falling three years after the issuance date, are convertible into maximum 300,000,000 common shares, representing 14.21% stake, at a fixed conversion price is HKD 0.42 per share, subject to adjustments. The conversion can be made from the issue date up to 5 business days before the maturity date. The company will incur issuance expenses of HKD 1,600,000, and receive net proceeds of HKD 124,400,000 in the transaction. Any convertible bonds which remain outstanding on the maturity date shall be redeemed by the company in full at the redemption price equal to the outstanding principal amount of such bonds together with interest accrued thereon. Prior to the closing of the transaction, the company has a total of 1,810,953,272 shares in issue, and the investor holds approximately 33.07% stake in the company. The transaction is subject to all necessary approvals including approval in extraordinary general meeting of shareholders of the company, and approval from the Stock Exchange of Hong Kong Limited for the listing of, and permission to deal in the common shares to be issued upon conversion. The transaction is expected to close on the fifth business day following the date on which all conditions are fulfilled or waived. The long stop date of the transaction is December 31, 2020.