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Gaw Capital as New Financial Investor Subscribing (i) Rights Shares at Premium to Market with lock-up, and (ii) 4 Years Senior Unsecured Note

HK$9 billion Asset Disposal Program to Narrow NAV Discount and Strengthen Shareholders Equity

HONG KONG, Feb. 3, 2025 /PRNewswire/ -- CSI Properties Limited ("CSI" or the "Group") (Stock code: 497) is pleased to announce a fundraising of approximately HK$1.5 billion by way of a rights issue of shares and an issuance of a HK$500 million senior unsecured note to Gaw Capital, to strengthen shareholders' equity and working capital. This proposal will introduce a new financial investor with global institutional expertise and enhance our balance sheet's  resilience for the current economic challenges.  Through a committed HK$9 billion active asset disposal program, we aim to narrow our NAV discount to our share price, and position the company for future growth opportunities in the evolving market landscape.

Key Highlights

1. Fundraising of approximately HK$2 billion to strengthen balance sheet to ride out current market challenges.
   
   The total fundraising of approximately HK$ 2 billion will be composed of new equity capital of approximately HK$ 1.5 billion from the rights issue and another HK$500 million in senior unsecured note to be provided by Gaw Capital, which is a landmark fundraising in this challenging capital market. The fundraising is expected to strengthen our balance sheet and financial position, providing for working capital support for ongoing projects, as well as for retirement and refinancing of our debt obligations in the current challenging times. The management will strive to maintain continuous dialogue with all stakeholders concerned in order to strike an appropriate balance on the use of proceeds from this fundraising.
   
   

2. Fundraising led by controlling shareholder and Gaw Capital via rights issue at premium to the last closing share price.
   
   As a demonstration of confidence, the rights issue will be priced at a premium to the last closing share price. This reflects the strong belief of our controlling shareholder and new strategic investor Gaw Capital in unlocking hidden shareholders value from the significant discount to the NAV and the long-term fundamental upside of CSI.
   
   

3. Controlling shareholder is leading the Fundraising with HK$400 million committed and will remain as the largest shareholder without any change of control after this approximately HK$2 billion total fundraising.
   
   Controlling shareholder Chairman Chung will be underwriting $400 million worth of rights shares, in addition to the participation from Gaw Capital, demonstrating their commitment to our Group's future. 
   
   

4. Issuing of Bonus Warrants to give shareholders opportunity to participate in future upside of CSI
   
   For every ten new consolidated shares, one bonus warrant will be issued with a conversion price of HK$ 0.22 into one ordinary shares, giving shareholders the opportunity to participate in the future upside of CSI.
   
   

5. New Investor Gaw Capital will provide capital commitment and a new institutional investor perspective.
   
   The introduction of Gaw Capital as an investor will contribute up to HK$ 758 million in new equity capital and an additional senior unsecured note of HK$500 million. In addition, our current management team is looking forward to working with Gaw Capital to leverage on their global network and institutional expertise in our key strategic decisions. Whilst control and management of CSI will remain unchanged, we believe Gaw Capital will become a valuable and strategic business partner.
   
   

6. Gaw Capital has committed to a four-year lock-up to show commitment to the future of CSI, subject to market and other conditions
   
   The lockup is a strong testament to the controlling shareholder and management team in managing CSI through the current challenging market. Furthermore, the lockup will help to avoid any market volatility on the price of our shares.
   
   

7. Strong commitment to a HK$9 billion asset disposal program to narrow valuation discount.
   
   The management team and Gaw Capital are committed to a HK$9 billion asset disposal program of our prime assets in both residential and commercial properties within the next 4 years, and will actively seek ways to increase and unlock shareholders value.
   
   

8. The rights issue will be anchored by our Chairman as controlling shareholder and leading international real estate private equity firm Gaw Capital, in addition to the Underwriter VMS Securities fully underwriting the balance of the whole rights issue in raising approximately HK$1.5 billion.  
   
   The rights issue will provide existing shareholders with the opportunity to invest in the future of CSI together with our Chairman and Gaw Capital. Gaw Capital is a leading real estate private equity firm in the Asia Pacific and other global markets and currently managing over US$35.8 billion in AUM.