Zhang Li International (01693) plans to issue a total of 7.4895 million payable capitalized shares to KP Lee Chambers

Zhitong Finance App News, Zhang Li International (01693) announced that on January 6, 2026, the company (as issuer) entered into a payables capitalization agreement with trustee KP Lee Chambers (as a subscriber). The company already agreed to allocate and issue, and the trustee (acting for and on behalf of trade creditors) agreed to subscribe for a total of HK$2.350 of payable capitalized shares at HK$2.350 per share of payables capitalized shares to settle outstanding trade receivables owed by relevant debtors to trade creditors item. The subscription amount of HK$17.603 million payable by the subscriber under the accounts payable capitalization agreement will be paid by fully offsetting the Group's outstanding trade payables due to trade creditors.

Assuming that there is no change in the issued share capital of the Company from the date of this announcement to the date of completion. The capitalized shares payable are equivalent to approximately 18.92% of the Company's issued share capital on the date of this announcement; and approximately 15.91% of the issued share capital of the Company expanded through the allocation and issuance of payable capitalized shares.

The capitalization of accounts payable allows the Group to settle its outstanding liabilities and avoid cash outflows without using the Company's existing financial resources. The directors believe that in order to strengthen the Group's financial and liquidity position to promote its business development, it is in the overall interests of the Company and shareholders to preserve working capital as much as possible.

Although the allotment and issuance of payable capitalized shares may have a dilution effect on existing shareholders, the capitalization of outstanding trade payables can reduce the Group's repayment and settlement pressure; and all of the capitalized shares payable will be recognized as the company's equity after allocation and issuance, thereby reducing the balance to liability ratio, expanding the capital base, and improving the Group's net asset value situation. The directors believe that the dilution effect of allocating and issuing payables capitalized shares is reasonable in this case.