ESR Group Limited Annual Report 2023 205 Notes to the Consolidated Financial Statements 31 December 2023 31. CONVERTIBLE BONDS On 9 September 2020, the Company issued US$350,000,000 in principal amount of 1.50% convertible bonds due 2025. The convertible bonds may be converted into ordinary shares of the Company at the option of the convertible bondholders at the prevailing conversion price on or after the date which is 41 days after 30 September 2020 up to and including on the ten day prior to 30 September 2025 (“Maturity Date”) (both days inclusive). On the date of issuance, the initial conversion price was HK$32.13 per share (“Conversion Price”), subject to adjustment upon occurrence of certain prescribed events based on the terms and conditions of the convertible bonds. Subject to satisfaction of certain conditions, the convertible bonds may be redeemed at the option of the Company at any time after 30 September 2023 and prior to the Maturity Date, in whole, but not in part, for the time being outstanding at their principal amount, together with interest accrued but unpaid to but excluding the date fixed for redemption. The Company will, at the option of the convertible bondholder to redeem all or some only of such holder’s convertible bonds on 30 September 2023 at 100% of their principal amount, together with interest accrued but unpaid up to but excluding such date. The convertible bonds are interest-bearing at 1.50% per annum payable semi-annually in arrears in March and September respectively. The fair value of the liability component was estimated at the issuance date using an equivalent market interest rate for a similar bond without a conversion option. The residual amount is assigned as the equity component and is included in shareholder’ equity. Redemption and Cancellation of Convertible Bonds during the year The Company announced on 15 September 2023 that, due to the declaration of interim dividend and final dividend for 2022 and interim dividend for 2023 respectively, accordingly the conversion price of the convertible bonds was adjusted to HK$31.61 per share with effect from 17 June 2023, and to HK$31.29 per Share with effect from 15 September 2023 respectively, as per the adjustment provisions stipulated under the terms and conditions of the convertible bonds. Based on the total outstanding principal amount of the convertible bonds of US$350,000,000 on the date of the announcement and the adjusted conversion price, 86,693,512 additional shares would be issued upon conversion of all the outstanding convertible bonds. On 29 September 2023, the Company announced that it received a conversion notice from a holder of the convertible bonds for the exercise of the conversion rights attached to the convertible bonds in respect of the aggregate principal amount of US$800,000 (the “Converted Bonds”). All of the Converted Bonds have been converted to ordinary shares (the “Conversion Shares”) and a total number of 196,150 Conversion Shares were issued to the bondholder on 19 September 2023 in accordance with the terms and conditions of the convertible bonds. The terms and conditions of the convertible bonds provide, among other matters, that the Issuer will, at the option of the holder of any convertible bonds (the “Put Option”), redeem all or some only of such holder’s bonds on 30 September 2023 at 100 per cent. of their principal amount, together with interest accrued but unpaid up to but excluding such date. At the same date, the Company announced that as the holders of the convertible bonds in an aggregate principal amount of US$348,600,000 gave notice to exercise their Put Option, the Company has on 29 September 2023 fully redeemed parts of the outstanding convertible bonds in an aggregate principal amount of US$348,600,000, representing approximately 99.6% of the initial aggregate principal amount of the convertible bonds. CORPORATE GOVERNANCE FINANCIAL STATEMENTS STRATEGIC REPORTS
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