RF GREEN EN AI (00527) intends to issue subscription shares to Yinghui, Ruiyuan and Yuan Wanyong.

RF GREEN EN AI (00527) announces that on November 6, 2026, the Company entered into the Yinghui Subscription Agreement with Yinghui, pursuant to which the Company has conditionally agreed to allot and issue 321.7 million Yinghui Subscription Shares to Yinghui at the Yinghui Subscription Price of HK$0.23 per Share, for an aggregate consideration of HK$74 million, to be satisfied by way of settlement of the Yinghui Convertible Bonds. The 321.7 million Yinghui Subscription Shares to be issued under the Yinghui Subscription Agreement represent approximately 13.21% of the total number of issued Shares as at the date of this announcement; approximately 11.67% of the total number of issued Shares as enlarged by the issue of the Yinghui Subscription Shares; and approximately 8.86% of the total number of issued Shares as enlarged by the issue of the Total Subscription Shares. On November 6, 2026, the Company entered into the Ruiyuan Subscription Agreement with Ruiyuan, pursuant to which the Company has conditionally agreed to allot and issue 330 million Ruiyuan Subscription Shares to Ruiyuan at the Ruiyuan Subscription Price of HK$0.23 per Share, for an aggregate consideration of HK$75.9 million, to be satisfied by way of settlement of the Ruiyuan Convertible Bonds. The 330 million Ruiyuan Subscription Shares to be issued under the Ruiyuan Subscription Agreement represent approximately 13.55% of the total number of issued Shares as at the date of this announcement; approximately 11.94% of the total number of issued Shares as enlarged by the issue of the Ruiyuan Subscription Shares; and approximately 9.09% of the total number of issued Shares as enlarged by the issue of the Total Subscription Shares. On November 6, 2026, the Company entered into the Yuan Subscription Agreement with Mr. Yuan Wanyong (Mr. Yuan), pursuant to which the Company has conditionally agreed to allot and issue 543 million Yuan Subscription Shares to Mr. Yuan at the Yuan Subscription Price of HK$0.23 per Share, for an aggregate consideration of HK$125 million, to be satisfied by way of settlement of the Yuan Outstanding Amount. The 543 million Yuan Subscription Shares to be issued under the Yuan Subscription Agreement represent approximately 22.32% of the total number of issued Shares as at the date of this announcement; approximately 18.25% of the total number of issued Shares as enlarged by the issue of the Yuan Subscription Shares; and approximately 14.97% of the total number of issued Shares as enlarged by the issue of the Total Subscription Shares. The settlement of the Yinghui Convertible Bonds, the Ruiyuan Convertible Bonds and the Yuan Outstanding Amount through the Yinghui Subscription, the Ruiyuan Subscription and the Yuan Subscription, respectively, is an appropriate step for the Company to discharge its payment obligations under the 2022 Convertible Bonds to the holders of the 2022 Convertible Bonds. This settlement method enables the Company to avoid redeeming the 2022 Convertible Bonds in cash, thereby reducing cash outflow and working capital pressure. The 2022 Convertible Bonds have reached their original maturity date and remain outstanding as at the date of this announcement. Default interest has continued to accrue on the outstanding principal amount, and as at June 30, 2026, the total amount payable was approximately HK$440.7 million (equivalent to approximately RMB381.8 million). The proceeds from Subscription B and Convertible Bond Subscription C, both completed on June 30, 2026, are insufficient to fully repay the outstanding amounts payable under the 2022 Convertible Bonds. Having considered the existing debts and overall financial position of the Group, the Board is of the view that the settlement of the Yinghui Convertible Bonds, the Ruiyuan Convertible Bonds and the Yuan Outstanding Amount will mitigate further accumulation of liabilities, alleviate the burden of the Group's current borrowings and interest, and reduce the Group's potential legal and financial risks. In addition, the issue of the Total Subscription Shares can lower the gearing ratio of the Group and broaden the Company's shareholder base, thereby increasing the liquidity of the Shares. Upon completion of the Yuan Subscription, Mr. Yuan will become a substantial shareholder of the Company, which demonstrates confidence in the Company's long-term growth prospects and value. In order to strengthen the capital base and address significant funding needs, the Board has considered various financing options and is of the view that, given its current financial position and circumstances, the Yinghui Subscription, the Ruiyuan Subscription and the Yuan Subscription are appropriate and feasible methods for the Group. As regards other equity financing solutions, the Directors (excluding the independent non-executive Directors, whose opinions will be set out in the letter from the Independent Board Committee to be included in the circular) have considered the possibility of raising additional funds from existing shareholders by way of rights issue or open offer. In particular, the results of the rights issue conducted in August 2023 and the share placing conducted in June 2026 under the general mandate of the Company (both of which were not fully subscribed) have been considered. However, the Board is of the view that, as such fund-raising methods generally require a longer lead time to implement and their success inherently depends on the level of shareholder subscription and prevailing market conditions at the relevant time, they would involve greater uncertainty. Accordingly, the Board is of the view that such methods may not be the most suitable fund-raising options for the Company at this stage. After due enquiry and careful consideration, the Directors (excluding the independent non-executive Directors, whose opinions will be set out in the letter from the Independent Board Committee to be included in the circular) are also of the view that, compared with other debt financing alternatives (such as borrowing from banks and other financial institutions), the Yinghui Subscription, the Ruiyuan Subscription and the Yuan Subscription are suitable and feasible ways for the Group to repay the 2022 Convertible Bonds, with the aim of strengthening the capital base of the Group. Given that bank borrowings would expose the Company to a higher interest burden due to the current high interest rate environment; and given the Group's high gearing ratio and continued loss-making position in recent years, banks or other financial institutions may require the Group to provide collateral or asset pledges, and the Board is of the view that borrowing from banks and other financial institutions may not be a feasible and beneficial fund-raising method available and applicable to the Group.