SouthGobi (01878.HK): JD Zhixing Fund Assigns PIK Interest Rights, Potential Issue of ~82.6M Shares

newtimespace.com reports, SouthGobi Resources (Hong Kong Stock Code: 1878) announced that JD Zhixing Fund L.P., the registered holder of the company's US$250 million convertible bonds issued on 19 November 2009 and the company's largest shareholder, has entered into a transfer agreement with Xingyue Haohan International Trade Co., Ltd. (the "Transferee"), pursuant to which JD Zhixing Fund has transferred to the Transferee the right to receive accrued and unpaid payment-in-kind interest of US$19 million under the convertible bonds and certain related deferral agreements (the "Transferred PIK Interest"). As stated in the company's announcement dated 23 March 2026, under the deferral agreement dated 23 March 2026, the payment date for the Transferred PIK Interest has been extended to 31 August 2027. The transfer will not affect the deferred payment date or amend the terms of the deferral agreement. Under the terms of the convertible bonds and related deferral agreements, the Transferee may at its discretion require the company to satisfy the Transferred PIK Interest by issuing fully paid and non-assessable ordinary shares, with the number of shares equal to the Transferred PIK Interest divided by the 50-day volume-weighted average price of the ordinary shares as of the date of demand. The company has received notice from the Transferee that it intends to convert the Transferred PIK Interest into ordinary shares in the near term. For illustrative purposes only, assuming the payment date is the date of this announcement and using the 50-day VWAP of CAD$0.327 per share and the Bank of Canada daily average exchange rate, the satisfaction of the Transferred PIK Interest would involve the issuance of approximately 82.6 million ordinary shares, representing approximately 32.7% of the total issued ordinary shares as at the date of this announcement.

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