China National Culture Group (HKG:0745) is proposing a capital reorganization, through a capital reduction and share subdivision, followed by a rights issue, according to a Wednesday filing on the Hong Kong bourse.
The firm will lower its issued share capital by canceling the paid-up share capital on each issued share by up to HK$0.39, reducing the par value of each issued share to HK$0.01 from HK$0.40 previously.
The credit arising from the capital reduction will be used to offset the accumulated loss of the entertainment company.
Next, each authorized but unissued share and preference share of par value HK$0.40 and HK$1.40, respectively, will be subdivided into 40 authorized but unissued adjusted shares and preference shares each of par value HK$0.01 and HK$0.035.
The board lot size for the trading of existing shares on the Hong Kong bourse will also be changed to 20,000 from 10,000 previously, according to the filing.
Following the capital reorganization, the firm proposes a rights issue on the basis of two rights shares for every one adjusted share to raise around HK$15.6 million. 156,244,304 rights shares will be issued to qualifying shareholders of record on Feb. 3, 2025, at HK$0.10 apiece.
Shares of the company closed 2% higher on Thursday.
Price (HKD): $0.15, Change: $+0.0030, Percent Change: +2.04%
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