LUYE PHARMA (SEHK: 02186) has issued an announcement regarding the company's US$180 million 6.25% convertible bonds due 2028 (bond stock code: 05818; ISIN: XS2645731220).

In accordance with Clause 8(F) (Purchase) of the terms and conditions of the existing convertible bonds, the company or any of its subsidiaries may, at any time and from time to time, purchase the existing convertible bonds in the open market or otherwise at any price, subject to applicable laws and regulations. The company now intends to repurchase the existing convertible bonds under such terms and conditions.

On June 3, 2026, the company entered into a dealer manager agreement with the dealer manager. For the proposed concurrent tender offer, the dealer manager has been appointed to, among other things, assist the company in soliciting indications of interest from existing convertible bond holders who may be willing to sell their existing convertible bonds to the company.

Concurrently with the tender offer, the company proposes to issue bonds to institutional investors. Underwriters have been appointed to coordinate the pricing of the proposed bond issue. Following the finalization of the bond terms, including size, issue price, and other conditions, the underwriters will enter into a subscription agreement with the company for the proposed bond issuance.

If the proposed bond issuance is completed, the company intends to use the net proceeds to refinance existing indebtedness, including but not limited to funding the concurrent tender offer, and for general corporate purposes.

The board of directors believes that through the concurrent tender offer and bond issuance, the company will be able to extend its debt maturity profile. The proposed bond issuance also offers additional benefits: it does not cause immediate dilution to existing shareholders' equity; and if the bonds are converted into new shares, it could strengthen the company's capital base and be beneficial for its long-term development.