Singapore has thrown its weight behind a planned SGD 50m ($36.7m) unsecured convertible bond issue by locally listed Chinese shipbuilder Yangzijiang.
The city state’s Economic Development Board (EDB) has subscribed for SGD 25m of the bonds via its investment arm EDB Investments Pte.
Alexandrian Worldwide Incorporated, which is backed by Yangzijiang’s current management team, has subscribed to the remaining SGD 25m worth of bonds.
Singapore’s SAC Capital is the placement agent for both transactions.
The bonds will have a maturity of 12 months and will be mandatorily converted into ordinary shares of the group upon obtaining necessary approvals from the relevant authorities, the Singapore Exchange as well as shareholders for the proposed spin-off and listing of Yangzijiang Financial Holding Pte Ltd (YZJFH).
The conversion price for the bonds is SGD 1.345 per share, calculated based on the 50-day volume weighted average share price of the group.
Yangzijiang said it intends to utilise its holdings of treasury shares, of which it owns 60.6m, for conversion, which will prevent dilution of minority shareholders’ interests.
China’s largest privately-owned shipbuilder announced its intention to spin-off YZJFH, which is its investing arm, to shareholders by way of dividend in specie in November 2021.
In return for the government’s investment, Yangzijiang has agreed to set up an advanced maritime research and development centre in Singapore to focus on areas such as green vessel technologies as well as autonomous vessels, cyber-physical simulations, digital twinning and advanced low latency communication systems.
“By setting up the centre in Singapore and leveraging on local expertise, Yangzijiang is committed to advance technological breakthrough and consolidate competitive advantages in green shipbuilding,” the company said.
Yangzijiang currently has research and development centres in China focusing on green vessel technology which is said sets a “strong underlying foundation for its first R&D center outside of China”.
YZJFH also intends to establish their global corporate headquarters and international investment division in Singapore, with the plan to launch an Advanced Maritime Fund focusing on sustainability-related investments.
It said that this would “help to plug the local funding gap of supporting enterprises to translate R&D results into commercialisation, boosting Singapore’s decarbonisation efforts and accelerating the growth of local maritime SMEs and startups”.
“We are honoured to have EDBI come onboard as our strategic investor and partner to accelerate Yangzjiang’s focus on ESG and their vote of confidence in the prospects of the group and YZJFH post the spin-off,” said Yangzijiang chief executive Ren Letian.
“The shipbuilding industry will see strong demand for further developments in green vessel technology and we are committed to collaborating with like-minded partners to seek breakthrough in this sector.
“With our first advanced maritime R&D center anchored in Singapore, we look forward to deepening our presence in Asia and leverage on Singapore’s R&D expertise to improve our standings within green shipbuilding and sustainability.”
