Zhejiang United Investment (08366) plans to implement capital restructuring

Zhitong Finance App News, Zhejiang Joint Investment (08366) issued an announcement. The board of directors proposed implementing a share capital restructuring involving share mergers, share capital reductions, and share splitting. Details are as follows:

(i) Share consolidation, combining issued and unissued existing shares with a face value of HK$0.01 per 20 shares into a consolidated share with a face value of HK$0.2 per share;

(ii) Reduction in share capital; (a) any piecemeal consolidated shares in the issued share capital of the Company will be cancelled, and the face value of each issued consolidated share will be reduced from HK$0.2 to HK$0.01 per share by cancelling the paid-up share capital of HK$0.19 per issued consolidated share;

(iii) Stock splitting, with each statutory but unissued consolidated share of HK$0.2 per share being split into 20 adjusted shares with a face value of HK$0.01 per share, immediately following the reduction in share capital; and

(iv) The proceeds from the reduction in share capital will be used to offset cumulative losses. After settling the accumulated losses, the balance received (if any) will be transferred to the Company's distributable reserve account and may be used by the Company in any manner permitted by the Company in accordance with all applicable laws and the Memorandum of Association and the Board of Directors.

At the date of this announcement, the trading unit for each lot of existing shares on the Stock Exchange is 10,000 existing shares per lot. The board of directors recommended that each trading unit traded on the Stock Exchange be changed from 10,000 existing shares to 5,000 adjusted shares, but only after the shareholders (or independent shareholders, as the case may be) pass resolutions approving the share capital restructuring, share offering, placement agreements and underwriting agreements at the special shareholders' meeting, as well as the transactions to be carried out under their respective subdivisions.

After the share capital restructuring came into effect, the board of directors proposed to offer shares at a subscription price of HK$0.36 per share offered share on the basis that the eligible shareholders were issued 1 share for each adjusted share held on the record date, to raise up to about HK$28.39 million in total proceeds (before deducting expenses) by issuing up to 78.86 million shares offered.

Assuming that all shares are subscribed, the net proceeds from the offering (after deducting expenses) are estimated to be approximately HK$26 million (if there is no change in the total number of issued shares between the date of this announcement and the date of the record (including that date), except due to capital restructuring). The Company intends to use the net proceeds as follows: (i) not less than 60% of the net proceeds will be used to repay outstanding debts; and (ii) the remaining net proceeds will be used as the Group's general working capital.