Yue Yuen Industrial said it entered into agreement with Citibank NA for
an unsecured loan of up to $300 million, raising capital to repay part
of existing bank debt.

The footwear giant said it would grant an option to Citi to require the
company to issue up to 92.25 million shares at a price of $4.21 each
(HK$32.72), about 21.2% premium to the previous close of HK$27 per
share. The exercise period of the option is for five years.

Citi also intended to issue covered warrants with maturity of five years
in an amount to be determined.

Separately, the controlling investor of Yue Yuen is selling up to
HK$772.5 million ($99.5 million) shares of the company. The Tsai family,
which controlled 49.98% of Yue Yuen before this
transaction, offered 30 million secondary shares, or 1.8% of the
company, at a price between HK$25 and HK$25.75 apiece through its
investment vehicle, Quicksilver Profits. The price range represented a
discount of 4.6% to 7.4% to Tuesday’s closing price of HK$27.