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Kinetic Development Group Limited Capital/Financing Update 2025
49818_rns_2025-06-30_b5d21a2d-23da-4174-b486-558682d9da97.pdf
Capital/Financing Update
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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.
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KINETIC DEVELOPMENT GROUP
Kinetic Development Group Limited
力量發展集團有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1277)
CONNECTED TRANSACTION SECOND SUPPLEMENTAL AGREEMENT TO 2022 LOAN AGREEMENT
SECOND SUPPLEMENTAL AGREEMENT TO 2022 LOAN AGREEMENT
References are made to the announcements of the Company dated 28 June 2022, 2 July 2024 and 9 July 2024 in relation to the 2022 Loan Agreement and the Supplemental Agreement. On 28 June 2022, Guizhou Mining, an indirect wholly-owned subsidiary of the Company, as the Lender, and Guizhou Energy, as the Borrower, entered into the 2022 Loan Agreement, pursuant to which the Lender agreed to provide the Loan to the Borrower in the principal amount of up to RMB200 million (equivalent to approximately HK$216 million*) for a term of 2 years commencing from the Interest Calculation Date. On 2 July 2024, the Lender and the Borrower entered into the Supplemental Agreement, pursuant to which the parties agreed that the repayment date of the Loan would be extended to 30 June 2025, and the interest rate from and including the date of the Supplemental Agreement would be raised to 2.5% above the one-year loan prime rate (LPR) in the PRC in effect during the term of the Loan.
The Board announces that on 30 June 2025 (after trading hours), Guizhou Mining and Guizhou Energy entered into the Second Supplemental Agreement, pursuant to which the parties agreed that the repayment date of the Loan be further extended to 30 June 2027. Other than the above, the other terms and conditions of the 2022 Loan Agreement and the Supplemental Agreement continue to be in full force and effect.
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LISTING RULES IMPLICATIONS
As of the date of this announcement, the Borrower is indirectly held as to 100% by Mr. Zhang Li, a substantial shareholder of the Company. The Borrower is an associate of Mr. Zhang Li thus a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transaction contemplated under the Second Supplemental Agreement constitutes a connected transaction of the Company under the Listing Rules.
As the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Connected Transaction are more than 0.1% but less than 5%, the Connected Transaction is subject to the announcement, reporting and annual review requirements but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
THE SECOND SUPPLEMENTAL AGREEMENT TO 2022 LOAN AGREEMENT
The principal terms of the Second Supplemental Agreement are set out below:
Date of Second Supplemental Agreement: 30 June 2025
Parties:
(i) Guizhou Mining, as the Lender
(ii) Guizhou Energy, as the Borrower
Subject matter: Pursuant to the Second Supplemental Agreement, the Lender agreed to extend the repayment date of the Loan to 30 June 2027.
Principal amount: Up to RMB200 million (equivalent to approximately HK$216 million*)
Term of the Loan: From the Interest Calculation Date to 30 June 2027
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Interest:
Pursuant to the Second Supplemental Agreement and the Supplemental Agreement, the Loan shall bear interest from and including the date of the Supplemental Agreement at 2.5% above the one year loan prime rate (LPR) in PRC in effect during the term of the Loan, which is higher than the interest of 1.5% above the one year loan prime charged under the 2022 Loan Agreement. The interest shall be paid together with the principal amount upon the expiry of the Second Supplemental Agreement.
Purpose:
The Loan shall be used by the Borrower for the construction and operation of the Target Mine.
Repayment:
The principal amount of the Loan together with all the outstanding interest accrued thereon shall be repayable in full by the Borrower to the Lender upon expiration of the term of the Loan.
During the term of the Loan, the Borrower may prepay the Loan provided that the Borrower shall notify the Lender five (5) business days in advance.
BASIS FOR DETERMINATION OF THE INTEREST RATE
The interest rate payable by the Borrower to the Lender under the Second Supplemental Agreement and the Supplemental Agreement is 2.5% above the one year loan prime rate (LPR) in PRC in effect during the term of the Loan, which is higher than the interest rate of 1.5% above the one year loan prime rate (LPR) in PRC under the 2022 Loan Agreement. This interest rate was determined as a result of the negotiation on an arm's length basis between the Lender and the Borrower, taking into account the prevailing commercial lending rate between companies and the Borrower's financial standing such as their assets and cash positions.
REASONS FOR AND BENEFITS OF ENTERING INTO THE SECOND SUPPLEMENTAL AGREEMENT
The terms and conditions of the Second Supplemental Agreement were negotiated on an arm's length basis between the Lender and the Borrower. The Directors (including the independent non-executive Directors) consider that the Second Supplemental Agreement was entered into on normal commercial terms.
Taking into account that (i) the Loan has been funded from the Group’s temporarily idle funds, which would not affect the working capital or daily operations of the Group; (ii) the expected return to be generated from the Loan as extended by the Second Supplemental Agreement, taking into account the interest chargeable to the Borrower under the Second Supplemental Agreement, would increase the Group’s revenue; and (iii) entering into the Second Supplemental Agreement facilitates the Borrower’s continual development of the Target Mine which the Group intends to acquire subject to the requisite shareholder approvals, the Directors (including the independent non-executive Directors) believe that the transaction under the Second Supplemental Agreement is fair and reasonable and in the interests of the Company and its shareholders as a whole.
LISTING RULES IMPLICATIONS
As of the date of this announcement, the Borrower is indirectly held as to 100% by Mr. Zhang Li, a substantial shareholder of the Company. The Borrower is an associate of Mr. Zhang Li thus a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transaction contemplated under the Second Supplemental Agreement constitutes a connected transaction of the Company under the Listing Rules.
As the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Connected Transaction are more than 0.1% but less than 5%, the Connected Transaction is subject to the announcement, reporting and annual review requirements but exempt from the circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
Ms. Zhang Lin, a non-executive Director, being an associate to Mr. Zhang Li who has material interest under the Second Supplemental Agreement, had abstained from voting at the Board meeting approving the Second Supplemental Agreement and the transactions thereunder.
GENERAL INFORMATION
The Group is principally engaged in the extraction and sales of coal products.
Guizhou Mining, the Lender, indirectly wholly-owned by the Company, is principally engaged in the investment, management and sales of coal products, and the manufacturing and sales of mining equipment.
Guizhou Energy, the Borrower, is a limited liability company established in the PRC on 27 September 2011. Guizhou Energy is principally engaged in the management of mining assets investment, sales of mining products and the manufacturing and sales of mining machineries. Guizhou Energy is indirectly held as to 100% by Mr. Zhang Li, a substantial shareholder. As such, Guizhou Energy is a connected person of the Company and the Loan constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
DEFINITIONS
“2022 Loan Agreement” the loan agreement entered into between Guizhou Mining and Guizhou Energy on 28 June 2022, pursuant to which Guizhou Mining agreed to provide the Loan to Guizhou Energy in the principal amount of up to RMB200 million (equivalent to approximately HK$216 million*) for a term of 2 years commencing from the Interest Calculation Date;
“Baosen District” Guizhou Liupanshui Baosen Exploration District** (貴州省六盤水市寶森勘查區);
“Board” the board of Directors;
“Borrower” or “Guizhou Energy” Guizhou Liliang Energy Co., Ltd.** (貴州力量能源有限公司), a company incorporated in the PRC with limited liability on 27 September 2011;
“Company” Kinetic Development Group Limited (formerly known as Kinetic Mines and Energy Limited), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange;
“Connected person(s)” has the meaning ascribed to it under the Listing Rules;
“Connected Transaction” the connected transaction under the Second Supplemental Agreement;
“Director(s)” the director(s) of the Company;
“Group” the Company and its subsidiaries;
“HK$” Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong” the Hong Kong Special Administrative Region of the PRC;
“Interest Calculation Date” the date on which the Loan is remitted to the bank account of the Borrower by the Lender;
“Lender” or “Guizhou Mining” Guizhou Kinetic Mines Co., Ltd.**（贵州力量礦業有限公司），a company incorporated in the PRC with limited liability on 21 December 2020;
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;
“Loan” a loan of up to RMB200 million (equivalent to approximately HK$216 million*) granted by the Lender to the Borrower pursuant to the 2022 Loan Agreement (as supplemented by the Supplemental Agreement and the Second Supplemental Agreement);
“Mining Licence” the mining licence (licence number: C5200002011111120120278) issued by the Department of Natural Resources of Guizhou Province of the PRC**（贵州省自然资源廳）with a validity period from December 2017 to August 2040;
“PRC” the People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;
“RMB” Renminbi, the lawful currency of the PRC;
“Second Supplemental Agreement” the second supplemental agreement to the 2022 Loan Agreement entered into between the Lender and the Borrower on 30 June 2025;
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“Stock Exchange” The Stock Exchange of Hong Kong Limited;
“substantial shareholder” has the meaning ascribed to this term under the Listing Rules;
“Supplemental Agreement” a supplemental agreement to the 2022 Loan Agreement entered into between the Lender and the Borrower on 2 July 2024;
“Target Mine” Guizhou Daxinan Mining Co., Ltd. Shuicheng County Tailin Coal Mine** (貴州大西南礦業有限公司水城縣猴場鄉泰麟煤礦), located in southwestern part of Guizhou Province, PRC, inclusive of the Mining Licence, the mineral assets and exploration rights consolidated from the Tailin Mine, Zhenxing Mine, the Xiaoyuantian Mine and Baosen District;
“Tailin Mine” Guizhou Luzhong Mining Co., Ltd. Shuicheng County Tailin Coal Mine** (貴州魯中礦業有限公司水城縣猴場鄉泰麟煤礦);
“Xiaoyuantian Mine” Zhijin County Zhenxing Coal Mine** (織金縣官寨鄉小圓田煤礦);
“Zhenxing Mine” Guizhou Luzhong Mining Co., Ltd. Zhijin County Zhenxing Coal Mine** (貴州魯中礦業有限公司織金縣城關鎮振興煤礦);
“%” per cent.
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- For the purposes of illustration only, any amount denominated in RMB in this announcement was translated into HK$ at the rate of RMB1 = HK$1.08. Such translations should not be construed as a presentation that the amounts in question have been, could have been or could be, converted at any particular rate at all.
** The English translation of the Chinese name(s) in this announcement, where indicated, is included for information purpose only, and should not be regarded as the official English name(s) of such Chinese name(s).
By order of the Board
Kinetic Development Group Limited
Ju Wenzhong
Chairman and Executive Director
Hong Kong, 30 June 2025
As at the date of this announcement, the Board comprises seven Directors, of whom three are executive Directors, namely Mr. Ju Wenzhong (Chairman), Mr. Li Bo (Chief Executive Officer) and Mr. Ji Kunpeng; one is a non-executive Director, namely Ms. Zhang Lin; and three are independent non-executive Directors, namely Ms. Liu Peilian, Mr. Chen Liangnuan and Ms. Xue Hui.
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