ESR Group Limited Annual Report 2022 Directors’ Report 111 Saved as disclosed above, during the year ended 31 December 2022, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the listed securities of the Company. ORDINARY SHARES ISSUED During the year ended 31 December 2022, a total of 1,545,384 and 13,410,571 ordinary shares were issued by the Company in satisfaction of the 2,496,761 and 16,899,687 options exercised under KM ESOP and Tier 1 ESOP respectively, since all options holders opted for net share settlement method in lieu of paying in full the exercise price for the number of shares over which the option was exercised. The shares issued at nominal value of US$0.001 each were credited as fully paid. During the year ended 31 December 2022, a total of 206,267 ordinary shares were issued by the Company in satisfaction of 593,967 shares vested under the Long Term Incentive Scheme. There shares issued at nominal value of US$0.001 each were credited as fully paid. Save as disclosed above in this annual report, during the year ended 31 December 2022, there was no other issue of equity securities (including securities convertible into equity securities) of the Company. Details of the movements in the share capital of the Company and the shares issued during the reporting year are disclosed in note 41 to the Consolidated Financial Statements. CONVERTIBLE BONDS ISSUED In September 2020, the Company completed the issuance of US$350 million 1.50 per cent convertible bonds due 2025 (the “Bonds”) to professional and institutional investors. The Bonds may be converted into ordinary shares of the Company at the conversion price of HK$32.13 per share (subject to adjustment) and assuming full conversion of the Bonds, the Bonds will be converted into 84,427,015 shares, representing approximately 2.77% of the then issued share capital of the Company and approximately 2.69% of the then issued share capital of the Company as enlarged by the issue of such conversion shares (assuming that there is no other change to the issued share capital of the Company). The Bonds are listed and traded on the Singapore Exchange Securities Trading Limited. The net proceeds from the Bond Issue, after deducting fees, commission and expenses payable in connection with the Bond Issue, was approximately US$345.0 million, which the Company is using for refinancing of existing borrowings, financing of potential acquisition and investment opportunities as well as the working capital requirements and the general corporate purposes of the Group. Based on the net proceeds and assuming the full conversion of the Bonds, the net price per share is approximately HK$31.67. The net proceeds have been fully utilised in year 2021 for the purposes as disclosed in the Company’s announcement dated 10 September 2020. The Directors believe that the Bond Issue will bring about a diversification of funding sources and expansion of investor base. This is the first convertible bond issue for the Company, and is in line with its capital management strategy. For the year ended 31 December 2022, there is no conversion of the Bonds into ordinary shares of the Company. Details of the convertible bonds balance as of 31 December 2022 is disclosed in note 31 to the Consolidated Financial Statements. COMPLETION OF THE ACQUISITION OF ARA ASSET MANAGEMENT LIMITED Reference is made to (i) the announcements of the Company dated 4 August 2021, 24 August 2021, 12 October 2021, 3 November 2021 and 20 January 2022 and (ii) the circular issued by the Company dated 18 October 2021 in relation to the business combination of ARA Asset Management Limited and its subsidiaries with the Group (the “ARA Acquisition”). The ARA Acquisition was completed on 20 January 2022. The total consideration of US$4,859 million was satisfied with US$519 million in cash and issuance of 1,345,898,078 new Shares, determined based on the prevailing share price on completion of HK$25.15 per Share. STRATEGIC REPORT FINANCIAL STATEMENT CORPORATE GOVERNANCE
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