Shares of ND PAPER (02689) rose nearly 6% during the trading session. At the time of writing, the stock is up 4.05% to HK$6.68, with a turnover of HK$936.401 million.

The catalyst for the move stems from two significant announcements made by the company on June 15. ND PAPER entered into loan agreements with several banks, securing a three-year term loan of RMB 2 billion at an interest rate of just 2.73%. Concurrently, the company initiated a cash tender offer to repurchase its US$400 million 14% perpetual capital securities.

This refinancing initiative, replacing old debt with new, is expected to substantially lower the company's funding costs and significantly optimize its financial structure. Analysis indicates that the annual interest expense on the perpetual securities was approximately RMB 400 million. The new bank loan carries a financing cost of less than 3%, markedly lower than the original 14% coupon rate on the perpetual notes. If the entire amount is repurchased and cancelled, the company could save around RMB 300 million in financial expenses annually.

Furthermore, the appreciation of the Renminbi exchange rate is generating foreign exchange gains, which will further amplify the improvement in profitability. In a show of confidence, the company's management has voluntarily waived their entitlement to a 7% early bird premium, effectively conceding benefits worth approximately US$23 million, underscoring their belief in the firm's long-term development prospects.