Global Corn Group Limited — Capital/Financing Update 2022

Jul 25, 2022

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03889)

SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

On 24 July 2022, the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue an aggregate of 305,517,200 new Shares at the Subscription Price of HK$0.1 per Subscription Share.

The Subscription Shares represent 20.0% of the existing issued share capital of the Company and approximately 16.7% of the total issued share capital of the Company as enlarged by the Subscription Shares.

THE SUBSCRIPTION AGREEMENT

On 24 July 2022, the Company and the Subscriber entered into the Subscription Agreement, the principal terms of which are set out below:

Date : 24 July 2022

Parties : (a) The Company, as issuer; and

(b) The Subscriber, as subscriber.

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To the best of the Directors’ knowledge, the Subscriber is wholly owned by Mr. Kong Zhanpeng. Mr. Kong Zhanpeng was an executive Director who resigned from such position on 31 December 2018. He was also an executive director, chief executive officer and chief economist of GBT until 23 May 2014, 1 October 2018 and 20 December 2019, respectively.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner are third parties independent of, and not connected with the Company and its connected persons.

Subscription

The Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue 305,517,200 new Shares at the Subscription Price of HK$0.1 per Subscription Share to the Subscriber, at an aggregate consideration of approximately HK$30,551,720 and nominal value of HK$30,551,720. Such consideration shall be paid by telegraphic transfer to the bank account of the Company at least three Business Days prior to the date of the Subscription Completion.

Subscription Shares

The Subscription Shares represent:

• (i) 20.0% of the existing issued share capital of the Company as at the date of this announcement; and

• (ii) approximately 16.7% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares only (assuming there will be no change in the issued share capital of the Company between the date of this announcement and the date of Subscription Completion, save for the allotment and issue of the Subscription Shares).

The Subscription Shares, when allotted and issued, will rank pari passu in all respects among themselves free from all liens, charges, guarantee, adverse interests and adverse claims, and with the Shares in issue on the date of allotment and issue of the Subscription Shares including all dividends declared or payable or distributions made or proposed on or after the date of execution of the Subscription Agreement.

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Conditions precedent to the Subscription Completion

Subscription Completion is conditional upon fulfilment of the following conditions prior to 4 p.m. on or before the Long Stop Date:

• (a) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Subscription Shares;

• (b) the Company obtains all approvals and/or filings required for the Subscription Shares and other related transactions under the Subscription Agreement in accordance with the relevant laws and regulations of the PRC involving state-owned enterprises;

• (c) (where necessary) GBT complying with all applicable laws and regulations (including the Listing Rules) in respect of the transactions contemplated under the Subscription Agreement;

• (d) the Subscriber being satisfied with the results of the financial, business and legal due diligence investigations in respect of the Company (including but not limited to the due diligence investigations in respect of all debts owed and guarantees provided by the Company), and the results of such due diligence investigations not indicating any breach of warranties given under the Subscription Agreement and/or any inaccurate and/or misleading statements made by the Company in the Subscription Agreement; and

• (e) all the warranties given under the Subscription Agreement remaining true, accurate and not misleading in all material respects.

If the Company cannot fulfil any of the above conditions precedent, the Company shall serve a written notice to inform the Subscriber. The Subscriber may at its absolute discretion waive conditions precedent (d) and/or (e) above. In the event that any of the conditions of the Subscription is not fulfilled or waived at or prior to 4 p.m. on or before the Long Stop Date (or such later date as may be agreed between the Company and the Subscriber in writing), the Subscription Agreement shall terminate and all obligations of the Company and the Subscriber under the Subscription Agreement shall cease and determine and neither the Company nor the Subscriber shall have any claim against the other in respect of any matter arising out of or in connection with the Subscription Agreement except for any antecedent breach of any obligation and any liabilities under the Subscription Agreement.

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Subscription Completion

The Subscription Completion will take place on the fifth Business Day after the fulfilment (or waiver, as the case may be) of conditions precedent (a) to (e) set out in the paragraphs headed “Conditions precedent to the Subscription Completion” in this announcement (or on such other Business Day as may be agreed between the Company and the Subscriber in writing).

Nomination of Director

Subject to the applicable laws, regulations, the Articles and the Listing Rules, the Subscriber shall have the right to nominate and propose one executive Director candidate to be put forward for the appointment to the Board as Director, and the Company shall procure that such candidate be appointed to the Board as soon as practicable provided that (i) such candidate fulfills the qualification and experience requirements of a director under the applicable laws, regulations, the Listing Rules and the Articles; (ii) the appointment of such candidate shall be subject to the normal procedures for appointment of Director in accordance with the relevant provisions of the Articles and the approval of the nomination committee of the Company; and (iii) any Director so appointed by the Board will be subject to the retirement, re-election and Shareholders’ approval requirements under the Articles. Pursuant to the Articles, any Director appointed by the Board shall hold office until the next following general meeting (in the case of an addition to the Board) of the Company and shall then be eligible for re-election by the Shareholders.

Lock-up arrangement for the Subscription Shares

Pursuant to the Subscription Agreement, the Subscriber undertook that, without the prior written consent of the Company, during a period commencing from and including the date of the Subscription Completion and ending on and including the date which is 12 months from the date of the Subscription Completion, the Subscriber shall not, and shall procure that none of its associates, agents or companies controlled by it or nominees or trustees holding in trust for it shall sell, transfer or otherwise dispose of (or enter into any agreement to dispose of) any Subscription Shares held by the Subscriber, or the interests in the Subscription Shares, held by the Subscriber.

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SUBSCRIPTION PRICE

The Subscription Price is HK$0.1 per Subscription Share, which represents:

• (a) a premium of approximately 28.2% to the closing price of HK$0.078 per Share as quoted on the Stock Exchange on the Last Trading Day; and

• (b) a premium of approximately 26.9% to the average closing price of HK$0.0788 per Share as quoted on the Stock Exchange for the last five consecutive trading days prior to the Last Trading Day.

Taking into account the estimated expenses of the Subscription in the amount of approximately HK$550,000, the net price to the Company of each Subscription Share is estimated to be approximately HK$0.098. The Subscription Price was arrived at after arm’s length negotiations between the Company and the Subscriber with reference to (i) recent market price of the Shares and current market condition; and (ii) the financial situation of the Company. The Directors consider that the Subscription Price is fair and reasonable.

REASONS FOR THE SUBSCRIPTION

As at 31 December 2021, the Group had total cash and cash equivalents of approximately HK$7.8 million while the Group had current liabilities of approximately HK$1,381.1 million, which mainly consisted of (i) bank and other borrowings of approximately HK$927.5 million which are repayable within 12 months; (ii) other payables and accruals of approximately HK$313.7 million; and (iii) trade payables of approximately HK$113.8 million. The Group is in an imminent need of cash. By entering into the Subscription Agreement, the Group can raise fund for general working capital purposes and relieve part of the financial pressure from bank borrowings.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Subscription are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

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USE OF NET PROCEEDS

The gross proceeds from the Subscription will amount to HK$30,551,720. It is estimated that the net proceeds from the Subscription, after the deduction of relevant expenses, will be approximately HK$30,000,000.

Details on the intended use of the net proceeds from the Subscription are as follows:

Proposed use of the
net proceeds	Expected timeline of use	Approximate amount
		(HK$)
Repayment of bank and other	September 2022 – December	10,000,000
borrowings/payables of the	2022
Group’s PRC subsidiaries
Procurement of corn and other	September 2022 – December	20,000,000
operational expenses	2022

FUNDRAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

The Company has not conducted any fund raising activities in the 12 months immediately preceding the date of this announcement.

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the date of this announcement, the Company has 1,527,586,000 Shares in issue. Set out below is a table showing the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the Subscription Completion (assuming there will be no change in the issued share capital of the Company between the date of this announcement and the date of the Subscription Completion, save for the allotment and issue of the Subscription Shares).

Name of Shareholders GBT_(Notes 1 & 2) The Subscriber and its ultimate benefcial owner(Note 3)_ Public Shareholders Total:	As at the date of this announcement Number of % Shares (Approx.) 978,278,000 64.04 784,000 0.05 548,524,000 35.91 1,527,586,000 100.00	Immediately after the Subscription Completion Number of % Shares (Approx.) 978,278,000 53.37 306,301,200 16.71 548,524,000 29.92 1,833,103,200 100.00	Immediately after the Subscription Completion Number of % Shares (Approx.) 978,278,000 53.37 306,301,200 16.71 548,524,000 29.92 1,833,103,200 100.00
			100.00

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Notes:

• (1) As at the date of this announcement, amongst the 978,278,000 Shares held by GBT, 500,000 Shares were held by GBT as beneficial owner, the remaining 977,778,000 Shares were held by GBT through Global Corn Bio-chem Technology Company Limited (“ Global Corn Bio-chem ”), a wholly owned subsidiary of GBT. Therefore, GBT is deemed to be interest in all the Shares in which Global Corn Bio-chem is interested in according to the SFO.

• (2) These Shares are registered in the name of or deemed to be interested by GBT, of which the issued share capital is beneficially owned as to approximately 35.2% by Modern Agricultural Industry Investment Limited (“ Modern Agricultural ”) as at the date of this announcement. The entire issued share capital of Modern Agricultural is held by Modern Agricultural Industry Investment Holdings Limited (“ Modern Agricultural Holdings ”) which is in turn wholly-owned by 吉林省現代農業產 業投資基金 (Jilin Province Modern Agricultural Industry Investment Fund) (“ PRC LLP ”). The sole general partner of PRC LLP is 吉林省現代農業產業基金有限公司 (Jilin Province Modern Agricultural Industry Fund Limited) (“ GP ”). As at the date of this announcement, the investment capital of PRC LLP is owned as to 60.0% by 吉林省農業投資集團有限公司 (Jilin Agricultural Investment Group Co., Ltd.) (“ Nongtou ”) (Nongtou is controlled by 吉林省人民政府國有資產 監督管理委員會 (The State-Owned Assets Supervision and Administration Commission of the People’s Government of Jilin Province) (“ Jilin SASAC ”)), as to 26.7% by 銀華長安資本管理（北 京）有限公司 (Yinhua Wealth Capital Management (Beijing) Co., Ltd.) and as to 13.3% by 長春 市新興產業股權投資基金有限公司 (Changchun Emerging Industry Equity Investment Fund Co., Ltd.). Accordingly, each of Modern Agricultural, Modern Agricultural Holdings, PRC LLP, GP, Nongtou and Jilin SASAC is deemed to be interested in the interest held by GBT in the Company under the SFO.

• (3) To the best of the Directors’ knowledge, the Subscriber is wholly owned by Mr. Kong Zhanpeng. As at the date of this announcement, Mr. Kong Zhanpeng held 784,000 Shares. Upon the Subscription Completion, Mr. Kong Zhanpeng will be deemed to be interested in all the Shares interested by the Subscriber under the SFO.

GENERAL

General Mandate

The Subscription Shares will be allotted and issued under the General Mandate to allot, issue and deal with the Shares granted to the Directors by resolution of the Shareholders passed at the annual general meeting of the Company held on 6 June 2022, on which date the total number of Shares in issue was 1,527,586,000. As at the date of this announcement, the Board has not utilised the aforesaid General Mandate and the available number of Shares that can be issued under the General Mandate is 305,517,200 Shares. The 305,517,200 Subscription Shares to be allotted and issued will utilise all of the aforesaid General Mandate. As the Subscription Shares are to be issued under the General Mandate, the Subscription is not subject to Shareholders’ approval.

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Application for listing

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

As the Subscription Agreement may or may not complete, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

“Articles”	the articles of association of the Company
“associate(s)”	has the meaning ascribed thereto in the Listing Rules
“Board”	the board of Directors
“Business Day(s)”	any day (other than Saturdays) on which licensed banks in
	Hong Kong are open for business
“Company”	Global Sweeteners Holdings Limited, a company incorporated
	in the Cayman Islands with limited liability, the shares of which
	are listed on the Main Board of the Stock Exchange (Stock
	Code: 03889)
“connected person(s)”	has the meaning ascribed thereto in the Listing Rules
“Director(s)”	the director(s) of the Company
“GBT”	Global Bio-chem Technology Group Company Limited, a
	company incorporated in the Cayman Islands with limited
	liability, the shares of which are listed on the Main Board of the
	Stock Exchange (Stock Code: 00809)
“General Mandate”	the general mandate granted to the Directors pursuant to an
	ordinary resolution of the Shareholders passed on 6 June
	2022 to allot, issue and deal with up to 305,517,200 Shares,
	representing 20% of the issued share capital of the Company as
	at 6 June 2022

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“Group”	the Company and its subsidiaries from time to time
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Last Trading Day”	22 July 2022, being the last trading day prior to the date of the
	Subscription Agreement
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Long Stop Date”	31 December 2022 (or such later date as may be agreed
	between the Company and the Subscriber in writing)
“PRC”	the People’s Republic of China excluding, for the purpose
	of this announcement, Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“SFO”	the Securities and Futures Ordinance (Chapter 571, Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscriber”	Hartington Profits Limited, a company incorporate in the
	British Virgin Islands with limited liability and an independent
	third party of the Company
“Subscription”	the subscription of the Subscription Shares pursuant to the
	Subscription Agreement
“Subscription Agreement”	the conditional subscription agreement dated 24 July 2022
	entered into between the Company (as issuer) and the
	Subscriber (as subscriber) in relation to the Subscription

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“Subscription Completion” completion of the Subscription “Subscription Shares” 305,517,200 Shares to be subscribed by the Subscriber pursuant to the Subscription Agreement “Subscription Price” the subscription price of HK$0.1 per Subscription Share “%”

per cent.

By Order of the Board Global Sweeteners Holdings Limited Zhang Zihua Acting Chairman

Hong Kong, 24 July 2022

As at the date of this announcement, the Board comprises two executive Directors, namely, Mr. Zhang Zihua and Mr. Tai Shubin; and three independent non-executive Directors, namely, Mr. Fan Yeran, Mr. Fong Wai Ho and Mr. Lo Kwing Yu.

• For identification purposes only

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