Tibet Water Resources Ltd. (SEHK:1115) announced that it has entered into a subscription agreement for the private placement of 6% convertible bonds due 2019 for gross proceeds of HKD 600,000,000 on January 22, 2016. The transaction will include participation from new investor Tyee Capital Management (Cayman) Limited. The convertible bonds are convertible into common shares of the company at a fixed conversion price of HKD 4 per share and carry a fixed 6% interest rate payable semi-annually in arrears on June 30 and December 31 of each year before and on the maturity date.

The convertible bonds will mature on the third anniversary from the date of issuance. The company will issue a maximum of 150,000,000 shares of the company upon conversion. The investors will acquire 5.52% stake in the company upon conversion.

The convertible bonds are redeemable, unsubordinated, and unsecured. The closing of the transaction is subject to certain conditions precedent. The long stop date of the transaction is March 20, 2016.

If the conditions are not fulfilled on or before the long stop date, the agreement will cease and terminate and neither the company nor the Investor shall have any claim against each other, save for any antecedent breach. The estimated net proceeds would be approximately HKD 597,000,000.