Chong Fai Jewel (08537) announced that, in order to adapt to the group's future expansion and growth, the Board of Directors proposes to increase the authorized share capital from HKD 15 million (consisting of 150 million shares of HKD 0.1 each) to HKD 750 million (consisting of 7.5 billion shares of HKD 0.1 each) by adding an additional 7.35 billion shares of unissued shares (with the same rights as the existing shares). After the shareholders approve the resolution to increase the authorized share capital at the extraordinary general meeting of shareholders, the increase in authorized share capital will take effect on the same day of the extraordinary general meeting of shareholders.
After the increase in authorized share capital takes effect, the Board of Directors proposes to offer shares at HKD 0.12 per share (at the ratio of 1:3 based on the record date) through rights issue. This will issue a maximum of 225 million shares of new shares and raise a maximum of approximately HKD 27 million (before deduction of expenses), assuming no further issuance or repurchase of shares until the record date (including that day).
On June 25, 2024 (after the trading session), the Company and the placing agents have entered into a placing agreement. Pursuant to the placing agreement, the Company has conditionally appointed the placing agents and the placing agents have conditionally agreed to act as placing agents of the Company, to use their best endeavors to procure subscribers of the placing shares (i.e. any new shares not taken up and/or not sold by the shareholders). In accordance with the terms of the placing agreement, if all offer shares have been subscribed for in the offer by provisional allotment letters and/or excess application forms, the placing will not proceed.
If all the placing shares are subscribed for, a net proceeds of approximately HKD 26 million will be raised and used to expand the retail store network, renovate the decoration of the existing 7 retail stores, repay bank loans and interest due within the next year, and for general working capital of the group.