Qiansheng Group Holdings (08475) announced that the board of directors intends to submit a share merger proposal to shareholders, which involves merging the issued and unissued existing shares with a par value of HK $0.01 per share for every 10 shares into one consolidated share with a par value of HK $0.1 per share.
At present, the shares are traded on the stock exchange with 5000 shares per trading unit. After the merger takes effect, each trading unit of the combined shares will still be 5000 combined shares.
The company proposes to issue up to 88 million rights shares at a subscription price of HK $0.57 per rights share (assuming that the number of Rights Shares is subscribed) on the basis of the issuance of 2 Rights Shares for each combined share held on the record date after the share merger (including) takes effect. The total amount of proceeds raised (before deducting expenses) is up to HK $50.2 million (assuming that no new shares are issued or repurchased on or before the record date).
The net proceeds from the rights issue are estimated not to exceed approximately HK $48.1 million. The company intends to use the net proceeds from the rights issue in the following order of priority: to repay the loans (including principal and related interest) due and payable in the next 12 months, lease liabilities and lease related expenses; Used as the working capital of the group in the next 12 months; And used to settle part of the consideration and fund transaction costs related to potential acquisitions.
