PALINDA GROUP (08179) has announced a proposed capital reorganisation involving a share consolidation, capital reduction, and share subdivision. The plan will consolidate every 50 existing shares of HK$0.10 each in the company's capital into one consolidated share of HK$5.00 each.

Following the share consolidation, a capital reduction will take effect. This involves reducing the par value of each issued consolidated share from HK$5.00 to HK$0.001 by cancelling paid-up capital up to HK$4.999 per share. Any fractional consolidated shares arising from the consolidation will be cancelled. The credit of approximately HK$190.7 million generated from the capital reduction will be transferred to the company's distributable reserve account, which directors may use for all purposes permitted by applicable laws and the company's memorandum and articles of association.

After the capital reduction takes effect, each unissued consolidated share with a par value of HK$5.00 will be subdivided into 5,000 new shares of HK$0.001 each. The new shares will rank equally in all respects, and the capital reorganisation will not result in any change to the relative rights of shareholders. The board proposes that, subject to the share consolidation taking effect, the board lot size for trading on the Stock Exchange will be changed from 12,000 existing shares to 5,000 new shares. After the capital reduction and share subdivision become effective, the board lot size for trading on the Stock Exchange will remain at 5,000 new shares.

The company also proposes, following the capital reorganisation, to conduct a rights issue on the basis of one rights share for every two new shares held on the record date. The subscription price is set at HK$0.25 per rights share, aiming to raise up to approximately HK$4.77 million through the issuance of up to 19.078 million rights shares, assuming no change in the company's share capital by the record date. The net proceeds from the rights issue are expected to be up to approximately HK$4.32 million. Assuming full subscription under the rights issue, the company intends to use approximately HK$2.5 million of the net proceeds to repay a written-down outstanding principal amount under a loan from an independent non-financial institution. The remaining approximately HK$1.82 million will be used as general working capital for the group.