Yanchang Petroleum International to Issue US$60 Million Two-year Convertible Bonds at 6% Coupon Rate to Yanchang Petroleum Group

A Vote of Confidence from Parent Company

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Transaction
Highlights

1. Yanchang Petroleum International has
   received independent shareholder approval for issuing a USD60 million two-year
   convertible bonds to its parent group Yanchang Petroleum Group at a coupon rate
   of 6% p.a. The CB represents a vote of confidence of the parent group towards
   the Company’s development potential and is an affirmation of the Company’s
   position as an international listed mergers and acquisitions platform of the
   parent group;
2. The net proceeds, amounting to HK$469.9
   million, will be applied to redeem an existing CB and injected as working
   capital to the Company’s operations in Canada for development and expansion
   needs;
3. The Company’s financing costs will be
   substantially reduced after replacing the existing 10% coupon rate CB with the
   new CB at 6%;
4. The Company has been identifying
   mergers and acquisitions opportunities in Canada and along the Belt and Road
   region to expand its scale of operation and business footprint.

 

HONG KONG,
CHINA - Media OutReach - November 26, 2018 - Yanchang Petroleum International Limited (“Yanchang Petroleum
International” or the “Company”; stock code: 00346), is pleased to announce
that its independent shareholders approved the issuance of convertible bonds
(the “CB”) to its controlling shareholder Shaanxi Yanchang Petroleum (Group)
Co., Ltd (“Yanchang Petroleum Group”) at a Special General Meeting held on 23
November 2018.

 

The
US$60 million CB has a two-year maturity, bearing 6% interest per annum and a
conversion price of HK$0.076 per share. If fully converted, the parent
company’s shareholding will increase from 53.5% to 68.9%.

 

The
net proceeds will be used for the repayment of an existing CB and as
working capital for the oil producing
activities in Canada. This will
substantially reduce the Company’s financing cost as the coupon rate is reduced by a considerable 4%
p.a..

 

Mr.
Li Yi, Chairman and Executive Director of Yanchang Petroleum International, commented, “We are pleased with the unwavering support that our parent group
Yanchang Petroleum Group has offered us. It affirms the Company’s strategic
position as the parent group’s international listed acquisition platform. The
CB will provide new capital to establish a solid funding base for the Company
to achieve improved business performance and future expansion.”

 

Mr.
Bruno Deruyck, Chief Executive Officer and Executive Director of Yanchang
Petroleum International
said, “The new CB not only substantially lowers our financing costs, but also enable
us to inject capital to support the growth of our Novus operation. It also
represents a vote of confidence from our parent group towards our business
strategy and prospect. Looking forward, we will continue to seek new mergers
and acquisitions opportunities in both Belt and Road region and Canada to
further expand our business footprint and achieve better economies of scale.”

 

About Yanchang Petroleum International
(stock code: 00346)

Yanchang
Petroleum International is principally engaged in the following activities (i)
exploration, exploitation and operation of oil and gas; and (ii) fuel oil
trading and distribution. In its upstream operations, Yanchang Petroleum
International possesses operating oilfields in Saskatchewan and Alberta,
Canada, through its wholly owned subsidiary Novus, a Canadian enterprise. Novus
engages in the business of acquiring, exploring for, developing and producing
crude oil and natural gas. In its downstream operations, Yanchang Petroleum
International is principally engaged in wholesale, retail, storage and
transportation of oil products through its 70% owned subsidiary, Henan Yanchang
Petroleum Sales Co., Limited, and which has been granted valid licenses for
distribution and sales of oil products in China.

 

For details, please refer to
http://www.yanchanginternational.com