HANG YICK HLDGS (01894) announced that its board of directors intends to proceed with a capital reorganization and fundraising initiative, involving (i) share consolidation; (ii) an increase in authorized share capital; and (iii) a rights issue. The company proposes a share consolidation on the basis of every 20 issued and unissued shares consolidated into 1 consolidated share.

The board recommends increasing the company's authorized share capital from HKD 38 million (divided into 3.8 billion shares) to HKD 76 million (divided into 7.6 billion shares, or 380 million consolidated shares post-consolidation). The increase in authorized share capital will take effect upon approval by shareholders via an ordinary resolution at an extraordinary general meeting.

Following the share consolidation and capital increase, the board proposes a rights issue on the basis of 4 rights shares for every 1 consolidated share held on the record date, at a subscription price of HKD 0.46 per rights share. The rights issue aims to raise approximately HKD 84.7 million (before expenses) by offering up to 184,224,000 rights shares to eligible shareholders, assuming no change in the total issued shares before the record date after accounting for the consolidation effect.

The rights issue is exclusively for eligible shareholders and will not be extended to excluded shareholders. If fully subscribed, the net proceeds after deducting expenses are estimated at around HKD 82 million, with 64.0% allocated to support the group's existing and potential new projects, and 22.0% for settling debts, including trade payables and accrued expenses.