EARLY WARNING NEWS RELEASE FOR JD ZHIXING FUND L.P.
GEORGE TOWN, Cayman Islands, April 11, 2023 /CNW/ - JD Zhixing Fund L.P. (the "Fund") was issued 20,947,603 common shares (the "Common Shares") of SouthGobi Resources Ltd. (the "Corporation") on November 19, 2022, in satisfaction of interest owing to the Fund (the "Interest Payment") in the amount of US$2,900,000 under the secured convertible debenture held by the Fund representing an aggregate principal amount owing by the Corporation of US$250,000,000 (the "Convertible Debenture").
On November 11, 2022, the Fund entered into a new deferral agreement (the "2022 November Deferral Agreement") with the Corporation, pursuant to which the Fund agreed to grant the Corporation (i) a deferral of the interest payments which were due and payable on November 19, 2022 under the Convertible Debenture; and (ii) a deferral of the management fees payable under the Corporation's amended and restated cooperation agreement with the Fund. The Interest Payment was advanced in connection with a deferral of US$1,100,000 out of the payment-in-kind interest payment in the accrued sum of US$4,000,000 payable to the Fund on November 19, 2022 under the terms of the Convertible Debenture and the 2022 November Deferral Agreement.
The Interest Payment took place outside of Canada pursuant to a private arrangement and did not take place through the facilities of any stock exchange or any other marketplace.
Immediately prior to the Interest Payment, the Fund held 64,766,591 Common Shares, representing 21.94% of the issued and outstanding Common Shares, without giving effect to any conversion of any convertible securities of the Corporation, including the Convertible Debenture. Immediately following the Interest Payment, the Fund held 85,714,194 Common Shares, representing 29.03% of the issued and outstanding Common Shares, without giving effect to any conversion of any convertible securities of the Corporation, including the Convertible Debenture.
Assuming the conversion of the entire principal amount of the Convertible Debenture into Common Shares at a conversion price of CAD$8.88 per share, using the Bank of Canada March 15, 2023 exchange rate of one (1) United States dollar to 1.3778 Canadian dollars, the Fund would receive 38,789,414 Common Shares upon conversion of the Convertible Debenture and would hold 124,503,608 Common Shares representing 37.27% of the issued and outstanding Common Shares, on a partially diluted basis.
The Fund has acquired the Common Shares for investment purposes. The Fund will evaluate its investment from time to time and may, based on such evaluation, market conditions and other circumstances, increase or decrease its ownership of securities in the Corporation through market transactions, private agreements or otherwise.
The Fund is an exempted limited partnership formed under the laws of the Cayman Islands. The Fund's general partner is JD Dingxing Limited, a corporation formed under the laws of the Cayman Islands. The Fund's limited partner is Inner Mongolia Tianyu Trading Limited, a corporation formed under the laws of Hong Kong. The address for the Fund is 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, George Town, Cayman Islands.
This press release may contain forward looking information within the meaning of applicable securities legislation, which reflects the Fund's current expectations regarding future events. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Fund's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward looking information. The Fund does not undertake any obligation to update such forward looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE JD Zhixing Fund L.P.
For further information or to obtain a copy of the early warning reports, please contact: Zhu Chonglin, 5-2-603 District F, YiLin Haibowan District, Wuhai, Inner Mongolia, China, Email: [email protected]
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