China Energy Development Holdings Limited (Stock code: 228) reported receiving a High Court of Hong Kong injunction order granted on 12 September 2024. The order relates to a dispute under which two plaintiffs allege that certain convertible bonds (Relevant CBs) held by other defendants were transferred or converted without approval.

According to the announcement, the injunction prohibits the defendants from selling or converting their Relevant CBs below a specified threshold. The dispute does not involve the company directly, given that it concerns bondholders. However, China Energy Development (228) has confirmed that any transfer or conversion in contravention of the injunction will not be registered.

Legal advice obtained indicates that the injunction does not affect the ongoing corporate actions, including the Capital Reorganisation, Amendments, and Rights Issue. The adjustment mechanism within the convertible bonds allows bondholders to preserve their potential equity stake without dilution. Therefore, the injunction order does not materially impact the company’s operations or the value of the Relevant CBs.

China Energy Development (228) states that it has implemented safeguards to prevent any act that might breach or circumvent the injunction order. The announcement also highlights that additional updates will be provided should there be any significant developments regarding the injunction. Shareholders and potential investors are advised to exercise caution when dealing in the company’s shares.