Canvest modifies exchangeable bonds, faces special deal scrutiny

Canvest Environmental Protection Group Co (HKEX:1381), through its subsidiary Best Approach, has entered into an amendment agreement on April 9, 2025, with Shanghai Industrial and Ms. Loretta Lee to modify the terms and conditions of its exchangeable bonds. Key amendments include new reciprocal voluntary early redemption rights. Best Approach may redeem the bonds early by paying the principal amount plus accrued interest and an early redemption fee. Shanghai Industrial also gains a similar early redemption right. The "Early Redemption Fee" is calculated as A x 3.4% x C/360, where A is the outstanding Principal Amount, and C is the number of days from the BA Early Redemption Date to the Maturity Date (or 180, if lower). These amendments constitute a special deal requiring Executive consent under Rule 25 of the Takeovers Code, as the arrangement isn't extendable to all shareholders. An EGM will be held on May 12, 2025, to approve the amendments. As of the announcement date, Best Approach holds 1,335,615,837 shares of Canvest.