Changes in Hong Kong stocks | Dekang Agriculture and Animal Husbandry (02419) rose more than 5% at the end of the session, the company plans to issue US$100 million zero-interest convertible bonds at a premium to actively optimize the financial structure

The Zhitong Finance App learned that Dekang Agriculture and Animal Husbandry (02419) rose more than 5% at the end of the session. As of press release, it had risen 4.44% to HK$52.9, with a turnover of HK$235.603 million.

According to the news, on July 26, Dekang Agriculture and Animal Husbandry announced that it plans to issue 100 million US dollars of zero-interest convertible bonds due in 2027, with a net proceeds of about 99.7 million US dollars. This is the first time that the company has initiated refinancing since its listing in December 2023. The initial conversion price was HK$54.08 per H share, a 5% premium over the closing price of HK$51.50 before the announcement.

The Zhitong Finance App stated in “Dekang Agriculture and Animal Husbandry (02419) Launched for the First Time Since Launch to Optimize the Financial Structure and Accumulate a New Cycle”, 40% of the proceeds from Dekang Agriculture and Animal Husbandry's current bond issuance will be used to repay bank loans maturing within one year. Specifically, the portion used for debt repayment corresponds to the company's short-term bank loans of about RMB 2,539 billion and part of medium- to long-term loans maturing within one year. The annual interest rate for this batch of loans is between 0.82% and 4.75%. This means that Dekang Agriculture and Animal Husbandry will use extremely low-cost dollar bonds to replace some short-term domestic bank loans with relatively high interest rates. Replacing high-cost liabilities with low-cost capital at the bottom of the industry cycle can be seen as an active optimization of the financial structure.