ANCHORSTONE (01592) announced that the Board of Directors will propose an ordinary resolution at a special general meeting of shareholders, seeking approval to increase the company's authorized share capital from HK$50 million (divided into 500 million shares) to HK$400 million (divided into 4 billion shares) by creating an additional 3.5 billion unissued shares with a par value of HK$0.1 each.

All related shares will carry equal rights in all respects.

Upon shareholder approval of the resolution to increase the authorized share capital at the special general meeting, the capital increase will become effective on the date of that meeting.

The Board proposed a rights issue on the basis of 4 rights shares for every 1 existing share held on the record date, with a subscription price of HK$0.105 per rights share, representing a discount of approximately 42.86%.

The rights issue will involve the issuance of up to approximately 1.158 billion rights shares to raise a maximum of about HK$121.6 million (before accounting for set-off arrangements and expenses), assuming no change in the company's issued share capital between the date of this announcement and the record date.

The estimated net proceeds from the rights issue (after accounting for the effects of set-offs and deducting related expenses) will not exceed approximately HK$62.5 million, assuming no change in the issued share capital from the announcement date to the record date and that all eligible shareholders fully subscribe for their respective entitlements.

Approximately HK$41.2 million will be used to repay overdue bank loans and the interest accrued on them.

Approximately HK$13.1 million will be allocated to repay the outstanding balance of shareholder loans after set-offs.

Approximately HK$7.7 million is designated for settling outstanding trade and other payables.

The remaining balance of approximately HK$0.5 million will be allocated for the Group's general working capital purposes, covering daily salaries, office administrative expenses, and sales and distribution costs.