aibioLuye Pharma to issue US$180,000,000 bonds due 2031
Tickers 2186
Luye Pharma plans US$180,000,000 of 5.25% convertible bonds due 2031 and a concurrent repurchase of its 6.25% convertible bonds due 2028 at US$1,031.25 per US$1,000 of principal. The announcement says the two transactions may or may not complete.
Key facts
- Company
- Luye Pharma Group Ltd. (HKEX: 2186)
- News type
- Debt Financing
- Primary source
- Luye Pharma Group Ltd. announcement (2026-06-04)
The proposed 2031 bonds
Luye Pharma Group Ltd. (HKEX: 2186) said in an announcement dated June 4, 2026 that it had conditionally agreed to issue US$180,000,000 of 5.25% convertible bonds due 2031. The subscription agreement is dated June 3, 2026. The issue price is 100% of principal, and the issue date and maturity date are June 10, 2026 and June 10, 2031. The bonds are unsecured and, according to the announcement's summary of terms, rank at least equally with the company's other unsecured and unsubordinated obligations.
Conversion is set at an initial price of HK$2.71 a share, and holders may convert from the first anniversary of issue. The announcement says the price carries a premium to recent share prices. The announcement says the bonds could convert into a maximum of 520,498,892 shares, equal to about 13.03 per cent of the existing issued share capital and about 11.53 per cent of the capital as enlarged by those shares. The shares would be issued under the general mandate. The company will apply for the bonds to be listed on the Vienna Stock Exchange and for the conversion shares to be listed in Hong Kong.
The net proceeds, after commission and expenses, are expected to be about US$177.2 million, which the announcement puts at a net issue price of about HK$2.67 per conversion share. The company intends to use the proceeds to refinance existing indebtedness, including funding the repurchase described below, and for general corporate purposes.
The repurchase of the 2028 bonds
On June 3, 2026 the company and its dealer manager, UBS AG Hong Kong Branch, signed a dealer manager agreement under which the dealer manager helps collect offers from holders of its existing 6.25% convertible bonds due 2028. Those bonds were issued in July 2023, and the announcement refers to the company's July 6, 2023 notice on the issue. Under the existing bonds' terms, the company may repurchase them in the open market or otherwise.
Holders who offer their bonds would receive US$1,031.25 for each US$1,000 of principal. That is a price above par, paid while the same company is raising new convertible debt. At the date of the announcement, the company had received commitments from eligible holders to offer about US$89.74 million of principal to it. The remaining outstanding principal of the existing bonds is about US$90.26 million.
Caution from the company
The announcement says completion of the repurchase and the bond issue depends on conditions in the dealer manager agreement and the subscription agreement being met or waived. Either agreement may be terminated in certain circumstances. The company says the two transactions may or may not complete, and it tells shareholders and potential investors to exercise caution.
The announcement is therefore a set of proposals, not completed transactions. It says not all conditions to the subscription had been met when it was issued. They include the manager's satisfaction with its due diligence, a lock-up from the controlling shareholder, CSRC filing documents, consents from all lenders, and listing approvals. The announcement says the NDRC registration certificate has already been obtained. The manager may terminate the subscription agreement for breaches, unmet conditions or market disruption. The bonds are to be offered to no fewer than six independent professional investors.
Who is named
UBS AG Hong Kong Branch is the manager of the new bonds under the subscription agreement and the dealer manager for the repurchase. Citicorp International Limited is the trustee. The announcement names no legal counsel for either transaction. UBS AG, London Branch is the borrower under a stock lending agreement with the controlling shareholder, LuYe Pharmaceutical Investment Co., Ltd..
What the announcement does not show
The announcement contains no balance sheet or cash figure for Luye Pharma and does not set out its revenue or losses, so the size of the new debt against the company's resources cannot be measured. The board says the transactions extend the company's debt maturity profile, and the announcement says the company has not raised money by issuing equity in the past year. The bonds are not registered under the US Securities Act, and the announcement limits the offering to investors outside the United States.