Horizon Robotics Strikes Early Redemption Deal on US$924.86 Million Convertible Loan; CARIAD Faces 12-Month Lock-Up

Bulletin Express
Jul 22

Horizon Robotics (HORIZONROBOT-W) signed an amendment on 22 July 2026 to settle in advance the US$924.86 million convertible loan issued to CARIAD Estonia AS in December 2023. The original facility, due 7 December 2026, carried interest of 2.67% p.a. for the first two years and 5.67% p.a. thereafter, with accrued interest reaching approximately US$81.90 million as of 21 July 2026.

Key terms of the amended arrangement are:

1. Equity component • Horizon will issue 1.30 billion new Class B shares to CARIAD at the contractual conversion price of HK$3.99, bringing CARIAD’s aggregate holding to the agreed 9.9% threshold. • The share issuance offsets US$662.40 million of outstanding principal and interest.

2. Cash component • The company will pay US$344.40 million to settle the remaining principal and accrued interest not covered by the share issue. • An additional US$54.50 million compensates CARIAD for canceling its right to convert a further 716 million shares that would otherwise be deliverable at maturity. • Total cash outlay reaches US$398.90 million.

3. Closing and lock-up • Completion is expected within eight business days of signing. • CARIAD will be subject to a 12-month lock-up on the newly issued 1.30 billion shares plus its existing 269.71 million shares, totaling roughly 1.57 billion shares.

4. Termination • Upon closing, the original convertible loan agreement will terminate, eliminating future interest accruals and conversion obligations.

Rationale and valuation:

• Management cited avoidance of further interest costs, mitigation of potential dilution from issuing the remaining 716 million shares at a sub-market HK$3.99, and removal of exchange-rate uncertainty at maturity. • The US$54.50 million payment for the extinguished conversion right represents a 28.8% discount to its theoretical value of US$76.60 million, calculated via the Black-Scholes model (inputs: HK$4.45 spot price, 53.6% volatility, 0% dividend yield, 2.78% risk-free rate, 0.381-year term, USD/HKD 7.8418). • Horizon intends to fund the cash component with internal resources and/or external financing, including potential equity, bank loans or bond issues.

Shareholders are advised to exercise caution when dealing in the company’s shares.

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