China Kingstone Mining (HKG:1380) agreed to allot and issue 40 million new shares to AOF I at HK$0.20 apiece under the general mandate to settle a dispute between the parties regarding the conversion rights attached to certain bonds issued by the company, a Monday Hong Kong bourse filing said.

The dispute arose when AOF I wanted to exercise its conversion rights attached to tranche 1 bonds in the principal amount of HK$1.3 million at a conversion price of HK$0.0729 per conversion share, and the company wanted to redeem all of the then-outstanding bonds.

After the completion of the issue, AOF I will hold 15.69% of the enlarged issued share capital of the company.

The expected gross proceeds from the issue are HK$8 million and net proceeds are HK$7.8 million.

The marble stones and marble-related products company's shares fell over 11% on Monday's close.