GUANGZHOU, China, Jan. 6, 2025
/PRNewswire/ -- MINISO Group Holding Limited (NYSE: MNSO; HKEX:
9896) ("MINISO", "MINISO Group" or the "Company"), a global value
retailer offering a variety of trendy lifestyle products featuring
IP design, today announced an offering (the "Securities
Offering") of equity linked securities due 2032 in the aggregate
principal amount of US$550 million
(the "Securities"). Security holders may exchange their Securities
for cash at any time on or after the date which is six years after
the closing date to the date falling 10 scheduled trading days
prior to the maturity date (both days inclusive). The Securities
Offering is expected to close on or about January 14, 2025, subject to customary closing
conditions.
In connection with the Securities Offering, the Company expects
to enter into lower strike call and upper strike warrant
(collectively, the "Call Spread Transactions") with the managers of
the Securities Offering and/or their affiliates and/or other
financial institutions (each, a "Call Spread Counterparty") shortly
after the pricing of the Securities Offering. The Securities and
the lower strike call will be settled wholly in cash and the
Company may issue ordinary shares (the "Shares") only under the
upper strike warrant. This overall structure will enable the
Company to raise funds in a form similar to convertible debt
securities, whilst deferring potential dilution to a higher
effective exercise price.
The Company plans to use 50% of the net proceeds from the
Securities Offering and the Call Spread Transactions for overseas
store network expansion, supply chain optimization and development,
brand building and promotion, additional overseas working capital
and other general corporate purposes, and to use another 50% in
purchasing the Shares and/or American depositary shares (the
"ADSs") (each representing four Shares) from time to time pursuant
to its share repurchase programs. The Company believes that these
initiatives will further enhance the Company's long-term value for
shareholders by supporting growth and expansion, enhancing
operational efficiency and demonstrating confidence in the
Company's business fundamentals and commitment to maximize returns
for its shareholders
Terms of the Securities
When issued, the Securities will constitute direct,
unconditional, unsubordinated and (subject to the terms and
conditions of the Securities (the "Conditions")) unsecured
obligations of the Company and bear interest at a rate of 0.5% per
year, payable semiannually in arrears on January 14 and July
14 of each year, beginning on July
14, 2025. The Securities will mature on or about
January 14, 2032, unless earlier
redeemed, repurchased or converted in accordance with their terms
prior to such date. The Securities will be exchanged into cash
only.
The initial exercise price at which the Securities will be
exchanged will initially be HK$64.395
per Share, converted at a pre-determined exchange rate for U.S.
dollars, representing a premium of 32.5% over the expected offer
price of the Delta Placement as defined below (for reference and
illustration only, the "Delta Hedging Price") and a premium of
26.1% over the closing price of the Share of HK$51.05 per Share quoted on The Stock Exchange
of Hong Kong Limited ("HKEX") on January 6,
2025 (the "Stock Reference Price"). The exercise price
of the Securities is subject to adjustment upon the occurrence of
certain events, but will not be adjusted for any accrued and unpaid
interest. In addition, following certain fundamental changes that
occur prior to the maturity date, the Company will, in certain
circumstances, reduce the exercise price.
Security holders may exchange their Securities for cash: (i) at
any time on or after January 14, 2031
to the date falling 70 scheduled trading days prior to the maturity
date ("Initial Exercise Period"); and (ii) at any time from the
date falling 69 scheduled trading days preceding the maturity date
to the date falling 10 scheduled trading days preceding the
maturity date ("Final Exercise Period"), in accordance with the
terms of the Securities. Upon exercise by a Security holder of
their Securities, the Security holder will receive a cash
settlement amount in U.S. dollars and equal to the number of cash
settled shares underlying the exercised Securities (a notional
concept calculated by dividing the principal amount of the
Securities by the applicable exercise price on the exercise date)
multiplied by (i) if exercised during the Initial Exercise Period,
the volume weighted average price of a Share over a specified
period of trading days; or (ii) if exercised during the Final
Exercise Period, the higher of (a) the applicable exercise price of
the Securities, and (b) the volume weighted average price of a
Share over a specified period of trading days, calculated in
accordance with the Conditions.
Holders of the Securities may require the Company to redeem all
or some of such holder's Securities on January 14, 2028 and January 14, 2030 or in the event of certain
fundamental changes, in each case, at a redemption price equal to
100% of the principal amount of the Securities being redeemed, plus
accrued and unpaid interest, if any, up to (but not including) the
relevant redemption date.
In addition, the Company may redeem all but not part of the
Securities in the event of certain changes to tax laws or if less
than 10% of the aggregate principal amount of the Securities
originally issued remains outstanding at such time, in each case,
at a redemption price equal to 100% of the principal amount of the
Securities being redeemed, plus accrued and unpaid
interest, if any, up to (but not including) the related
redemption date.
The Securities have been offered to non-U.S. persons in offshore
transactions in reliance on Regulation S under the Securities Act
of 1933, as amended (the "Securities Act").
Call Spread Transactions
The Call Spread Transactions are generally expected to reduce
potential dilution to the Shares of the Company and offset cash
payments that the Company will be required to make in excess of the
principal amount of the Securities upon exchange of Securities by
the Security holders. This will give the Company greater financial
flexibility and reduce the risk exposure of the Company to market
fluctuations during the tenor of the Securities to a pre-determined
range.
The Call Spread Transactions are expected to include: (i) Lower
Strike Call: a call option transaction, granted by the Call Spread
Counterparties to the Company, exercisable at the discretion of the
Company, entitling the Company to (a) the difference, settled in
cash, between the exercise price of the lower strike call, which is
equivalent to the exercise price of the Securities, and the volume
weighted average price per Share over a specified period of trading
days, converted to U.S. dollars at the prevailing exchange rate,
and multiplied by (b) the number of Shares underlying the lower
strike call being exercised, and (ii) Upper Strike Warrant: a call
option transaction with an expected exercise price of HK$102.1 per Share, representing a premium of
110.0% over the Delta Reference Price (for reference and
illustration only) and a premium of 99.9% over the Stock
Reference Price, granted by the Company to the Call Spread
Counterparties, exercisable at the discretion of the Call Spread
Counterparties, which would entitle the Call Spread Counterparties
to receive newly allotted and issued Shares.
In connection with establishing their initial hedges of the Call
Spread Transactions, the Call Spread Counterparties or their
respective affiliates expect to purchase the Shares and/or enter
into various derivative transactions with respect to the Shares
shortly after the pricing of the Securities. This activity could
increase (or reduce the size of any decrease in) the market price
of the Shares, the ADSs, other securities of the Company or the
price of the Securities at that time. The effect, if any, of this
activity, including the direction or magnitude, on the market price
of the Shares, the ADSs, other securities of the Company or the
price of the Securities will depend on a variety of factors,
including market conditions, and cannot be ascertained at this
time.
In addition, the Call Spread Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivative transactions with respect to the
Shares, the ADSs, the Securities or other securities of the Company
and/or purchasing or selling the Shares, the ADSs, the Securities
or other securities of the Company in secondary market transactions
following the pricing of the Securities and prior to the maturity
of the Securities (and are likely to do so following any exchange
of the Securities, repurchase of the Securities by the Company upon
occurrence of certain fundamental changes or otherwise, in each
case, if the Company opts to unwind the relevant portion of the
Call Spread Transactions early). The effect, if any, of this
activity on the market price of the Shares and/or the ADSs, or the
price of the Securities will depend on a variety of factors,
including market conditions, and cannot be ascertained at this
time. Any of this activity could, however, also cause or avoid an
increase or a decrease in the market price of the Shares and/or the
ADSs, other securities of the Company or the price of the
Securities. In addition, if the upper strike warrant is exercised,
to settle their obligations under the Call Spread Transactions, the
Call Spread Counterparties or their respective affiliates expect to
sell up to the number of Shares underlying the Call Spread
Transactions at the time, which could cause a decrease in the
market price of the Shares and/or the ADSs, other securities of the
Company or the price of the Securities. Any of the above changes in
the market price of the Shares could affect whether the holders
exchange their Securities and value of the consideration that the
holders will receive upon exchange of the Securities. In addition,
any of the Call Spread Counterparties may choose to engage in, or
to discontinue engaging in, any of these transactions and
activities with or without notice at any time, and their decisions
will be in their sole discretion and not within the Company's
control.
Investor Hedging Transactions
The Company expects that certain purchasers of the Securities
may establish a short position with respect to the Securities by
entering into short derivative positions with respect to the Shares
(by entering into derivatives with an affiliate of one or more
managers of the Securities Offering), in each case, in connection
with the Securities Offering, and are expected to dynamically
adjust their short positions in respect of the Securities they
hold, in the market and/or through derivatives. Other investors in
the Securities may engage in similar arbitrage activities during
the tenor of the Securities. Any of the above market activities by
purchasers of the Securities could increase (or reduce any decrease
in) or decrease (or reduce any increase in) the market price of the
Shares, ADSs or the Securities at that time, and the Company cannot
predict the magnitude of such market activity or the overall effect
it will have on the price of the Shares, ADSs or the
Securities.
In order to facilitate hedging activities of the purchasers of
the Securities, a shareholder of the Company (the "Lender")
controlled by Mr. Guofu Ye, Founder,
Chairman and CEO of the Company, is
expected to enter into a securities lending deed with an
affiliate of one of the managers of the Securities Offering (the
"Borrower"), pursuant to which the Lender will lend a certain number of the Shares
(the "Borrowed Shares") to the Borrower. The managers of the
Securities Offering are expected to facilitate sales of the
Borrowed Shares in order to facilitate initial hedging by certain
purchasers of the Securities of the market risk they are exposed
with respect to the Securities (the "Delta Placement").
The Borrower or its affiliate will receive all of the proceeds
from the sale of the Borrowed Shares. Neither the Company nor the
Lender will receive any proceeds from the sale of the Borrowed
Shares.
Other Matters
The Securities and the Borrowed Shares have not been and will
not be registered under the Securities Act or securities laws of
any other places. They may not be offered or sold within
the United States or to U.S.
persons, except pursuant to an exemption from the registration
requirements of the Securities Act.
This press release shall not constitute an offer to sell or a
solicitation of an offer to purchase any securities, nor shall
there be a sale of the securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful.
This press release contains information about the pending
Securities Offering, and there can be no assurance that the
Securities Offering will be completed.
About MINISO Group
MINISO Group is a global value retailer offering a variety of
trendy lifestyle products featuring IP design. The Company serves
consumers primarily through its large network of MINISO stores, and
promotes a relaxing, treasure-hunting and engaging shopping
experience full of delightful surprises that appeals to all
demographics. Aesthetically pleasing design, quality and
affordability are at the core of every product in MINISO's wide
product portfolio, and the Company continually and frequently rolls
out products with these qualities. Since the opening of its first
store in China in 2013, the
Company has built its flagship brand "MINISO" as a globally
recognized consuming brand and established a massive store network
worldwide. For more information, please visit
https://ir.miniso.com/.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by words or phrases
such as "may," "will," "expect," "anticipate," "aim," "estimate,"
"intend," "plan," "believe," "is/are likely to,", "potential,"
"continue" or other similar expressions. Among other things, the
quotations from management in this announcement, as well as
MINISO's strategic and operational plans, contain forward-looking
statements. MINISO may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission (the "SEC") and HKEX, in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about MINISO's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: MINISO's mission, goals and strategies; future business
development, financial conditions and results of operations; the
expected growth of the retail market and the market of branded
variety retail of lifestyle products in China and globally; expectations regarding
demand for and market acceptance of MINISO's products; expectations
regarding MINISO's relationships with consumers, suppliers, MINISO
Retail Partners, local distributors, and other business partners;
competition in the industry; proposed use of proceeds; and relevant
government policies and regulations relating to MINISO's business
and the industry. Further information regarding these and other
risks is included in MINISO's filings with the SEC and the HKEX.
All information provided in this press release and in the
attachments is as of the date of this press release, and MINISO
undertakes no obligation to update any forward-looking statement,
except as required under applicable law.
Investor Relations Contact:
Email: ir@miniso.com
Phone: +86 (20) 36228788 Ext.8039
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SOURCE MINISO Group Holding Limited