Contel Technology Company Limited will seek shareholder approval on 14 July 2026 to issue 329.44 million new shares and expand its authorised capital, moves designed to inject up to HK$120.20 million gross (HK$119.70 million net) into the balance sheet of the financially strained semiconductor distributor.

Key terms

1. Specific-mandate fundraising • Subscription: Zhuangyan Investment International will subscribe for 271.23 million new shares at HK$0.365 each, generating HK$99.00 million gross (HK$98.70 million net). • Placing: Grand Moore Capital will place 58.21 million new shares on a best-effort basis, also at HK$0.365, for HK$21.20 million gross (HK$21.00 million net). • Issue size: 329.44 million shares equal to 250.00 % of current issued capital and 71.43 % of the enlarged share base (461.21 million shares). • Pricing: HK$0.365 represents a 34.82 % discount to the 4 May 2026 close of HK$0.560 and a 22.83 % discount to the preceding five-day average of HK$0.473. It is, however, 17.36 % above the 30 September 2025 unaudited NAV of HK$0.311 per share. • Completion: Subscription and placing are inter-conditional and targeted for completion by 31 July 2026; neither will proceed if the other fails, preserving the 25 % public-float requirement. • Post-deal ownership: The Subscriber will control 58.81 % of the enlarged share capital; existing chairman and CEO Mr Lam Keung’s stake will dilute to 14.37 %.

2. Use of proceeds (HK$119.70 million net) • HK$66.30 million: full settlement of US$7.50 million (HK$58.50 million) statutory-demand loan and accrued interest owed to Creditor-I. • HK$9.80 million: repay loan to Grand Power Union Technologies (Creditor-II). • HK$13.40 million: clear overdue trade payables to three principal suppliers. • HK$30.20 million: working capital (salaries HK$7.20 million; rent HK$0.90 million; admin HK$0.90 million; outstanding and future professional fees HK$5.60 million; inventory funding HK$15.60 million).

3. Capital structure enhancement The Board proposes increasing authorised share capital from HK$20.00 million to HK$200.00 million by creating 1.80 billion new shares, providing headroom for the current issuance and future financing.

4. Shareholder meeting An Extraordinary General Meeting will be held on 14 July 2026 in Hong Kong to approve: • Subscription Agreement; • Placing Agreement and 1 % placing commission; • Specific mandate for issuing the new shares; • Authorised capital increase.

No existing shareholder is required to abstain from voting. The register of members will close 9–14 July 2026.

Background

Contel Technology has faced liquidity pressure since FY 2022. On 12 March 2026 the company received a statutory demand for US$7.50 million from Creditor-I, and it also owes HK$9.80 million to Creditor-II plus HK$13.40 million in overdue supplier payments. Management views the proposed fundraising as essential to settle these obligations and stabilise operations.