China XLX Fertiliser (HKG:1866) has entered into a subscription agreement with Nitro Capital Limited, pursuant to which Nitro agreed to subscribe for the convertible bonds to be issued by China XLX in an aggregate principal amount of RMB324 million (HK$397 million).

Nitro is wholly owned by Primavera Capital (Cayman) Fund I L.P., a China-based private investment firm focusing on buy-out, control-oriented, and growth capital investments.

The convertible bonds will be convertible into shares at an initial conversion price of approximately RMB1.84 (HK$2.25) per share that represents a premium of 6.34% over China XLX's closing price last Friday. Assuming full conversion of the bonds, China XLX will issue 176 million shares, representing 14.97% of the enlarged issued share capital of China XLX.

The estimated net proceeds of the bond issue are RMB322 million (HK$393 million). China XLX intends to use the net proceeds for expansion projects and as general working capital.