NAR issues US$10mln and US$3mln convertible bonds

Proceeds will be used for NAR's general working capital, the acquisition of iron concessions in Mongolia and other acquisitions.

Iron and alluvial gold miner, North Asia Resources Holdings Limited (“NAR” or the “Company”), on Monday announced that on 29 October 2010 it has entered into a US$10,000,000 Convertible Bonds (“US$10M CB”) Subscription Agreement with Business Ally Investments Limited (“Business Ally”) and a US$3,000,000 Convertible Bonds (“US$3M CB”) Subscription Agreement with Grandwin Enterprises Limited (“Grandwin Enterprises”).

Business Ally is a wholly-owned subsidiary of CCB International Asset Management Limited which is in turn wholly-owned by CCB International (Holdings) Limited (“CCBI”) whereas the ultimate beneficial owner of Grandwin Enterprises is Mr. Leung Pak To Francis.

The US$10M CB Subscription Agreement
The US$10,000,000 principal amount of the Convertible Bonds has been subscribed by Business Ally on 29 October 2010, which would be due three years from the issue date. The issue price of each Conversion Share is HK$1.70, representing a premium of approximately 24.09% over the closing price of HK$1.37 per share as quoted on the Stock Exchange as at 29 October 2010. The net price to the Company of each Conversion Share is approximately HK$1.59.

Assuming full conversion of the US$10,000,000 Convertible Bonds, a total of 45,588,235 Conversion Shares will be issued by the Company, representing approximately 5.45% of the Company’s then existing issued share capital of 836,658,340 shares (inclusive of the US$3,000,000 Conversion Shares to be issued upon full conversion of the US$3,000,000 Convertible Bonds); and approximately 5.17% of the Company’s issued share capital as enlarged by the issue of the Conversion Shares upon full conversion of the Convertible Bonds, according to a NAR report.

The US$3M CB Subscription Agreement
The US$3,000,000 principal amount of the Convertible Bonds has been subscribed by Grandwin
Enterprises on 29 October 2010. The Convertible Bonds would be due three years from the issue date. The initial conversion price of each Conversion Share is HK$1.70, representing a premium of approximately 24.09% over the closing price of HK$1.37 per Share as quoted on the Stock Exchange as at 29 October 2010. The net price to the Company of each Conversion Share is approximately HK$1.54.

Assuming the US$3,000,000 Convertible Bonds are fully converted, a total of 13,676,470 Conversion Shares will be issued by the Company, representing approximately 1.66% of the Company’s existing issued share capital of 822,981,870 shares; and approximately 1.63% of the Company’s issued share capital as enlarged by the issue of the Conversion Shares upon full conversion.

The estimated net proceeds from the issue of the US$10M CB and US$3M CB of approximately HK$72.5 million and HK$21 million respectively will be used for the general working capital of the Group, the acquisition of iron concessions in Mongolia and/or other possible acquisitions in the future.

Mr. Joseph King, Chairman of NAR, said, “The subscription agreements with quality strategic investors like CCBI and Mr. Francis Leung illustrate their confidence in the growing business and affirmation on the future prospects of the Company. This move will broaden our capital base immediately by providing additional funding for the Group’s further development and also strengthening our competitiveness. We plan to use the funds as our working capital and for the acquisition of iron concessions in Mongolia. We would also keep an eye on other possible acquisitions in the future to maximise the shareholders’ returns.”