Star Group Asia Limited: Controlling Shareholder Pledges Convertible Bond Shares for HK\$10 Million Loan
Key Points
- Mr. Chan Man Fai Joe, Chairman, CEO, and ultimate controlling shareholder of Star Group Asia Limited, has pledged a substantial portion of his convertible bond holdings.
- The pledge was made by Metropolitan Lifestyle (BVI) Limited, a company wholly owned by Mr. Chan.
- The pledge secures a HK\$10 million loan from Greater Bay Finance Limited, an independent third party lender.
- A total of 380,000,000 convertible bond shares (“Charged Shares”) have been pledged.
- The Charged Shares represent approximately 59.2% of the current issued share capital of the company.
- If converted, these Charged Shares would represent around 37.2% of the issued share capital.
- This transaction does not fall within the scope of Rule 13.17 of the Hong Kong Listing Rules.
- Mr. Chan, directly and indirectly, owns 440,710,800 ordinary shares (about 68.7% of issued capital) and holds 836,000,000 convertible bond shares (at a HK\$0.5 conversion price per share) with a 3% coupon, maturing on October 22, 2030.
Details and Potential Impact for Shareholders
Star Group Asia Limited announced that on May 29, 2026, it was informed about a significant pledge of shares by its controlling shareholder. Mr. Chan Man Fai Joe, the company’s chairman and executive director, through his wholly-owned entity Metropolitan Lifestyle (BVI) Limited, has pledged 380,000,000 convertible bond shares as collateral for a HK\$10 million loan from Greater Bay Finance Limited.
The convertible bonds in question carry a 3% annual coupon and can be converted at HK\$0.5 per share until October 22, 2030. The total outstanding principal of these bonds is HK\$418,000,000, which equates to approximately 130.3% of the company’s current issued share capital.
Prior to the pledge, Mr. Chan controls a majority stake in the company, with 440,710,800 ordinary shares (68.7% of issued shares) and the aforementioned convertible bonds. The 380,000,000 pledged shares account for 59.2% of the issued share capital, and if fully converted, would represent 37.2% of the enlarged share capital post-conversion.
Potential Price Sensitivity: The pledge of a substantial number of shares by the controlling shareholder may be considered price-sensitive information. If the borrower defaults on the loan and the lender enforces the pledge, there could be a significant change in the company’s ownership structure. This may also raise questions about the controlling shareholder’s liquidity position. Such factors could influence investor sentiment and impact share price volatility.
The company clarifies that this pledge does not fall under Rule 13.17 of the Listing Rules, which typically requires disclosure of certain loan covenants or obligations affecting controlling shareholders.
Investors are advised to monitor further developments regarding the pledged shares and any subsequent changes in the controlling shareholder’s interest in the company.
Board Composition
- Executive Directors: Mr. Chan Man Fai Joe (Chairman & CEO), Ms. Cheung Wai Shuen, Mr. Lee Lap Yan Philip
- Non-executive Director: Mr. Tsui Wing Tak
- Independent Non-executive Directors: Dr. Wong Wai Kong, Mr. Leung Ka Tin, Mr. Mong Cheuk Wai
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional adviser before making any investment decisions related to Star Group Asia Limited.
