XINMING CHINA (02699) has announced a proposed rights issue for 2026. The company plans to issue new shares on the basis of one existing share entitling shareholders to subscribe for six new shares at a price of HK$0.188 per share. The initiative aims to raise up to HK$106 million before expenses through the issuance of a maximum of 564 million new shares, assuming no change in the total number of issued shares from the announcement date to the record date.
The 2026 rights issue will be conducted on a non-underwritten basis, meaning it will proceed regardless of the level of acceptance for the provisionally allotted shares, provided the conditions of the issue are met. The offer will be extended exclusively to eligible shareholders and will not be available to ineligible shareholders.
In the event of under-subscription, any unsubscribed shares, along with the rights shares not taken up by ineligible shareholders, will be placed by a placing agent to independent placees. Any shares that remain unplaced will not be issued, and the scale of the rights issue will be reduced accordingly. No additional application facility will be available.
Assuming no change in the number of issued shares by the record date, the 564 million new shares to be issued represent 600% of the existing issued share capital and approximately 85.71% of the enlarged share capital following the rights issue, assuming full acceptance by eligible shareholders.
Eligible shareholders accepting their provisional entitlements, or transferees of the nil-paid rights shares applying to subscribe, must pay the full subscription price of HK$0.188 per share. This price represents a discount of approximately 20.0% to the closing price of HK$0.235 per share on the last trading day on the Hong Kong Stock Exchange.
If the rights issue is fully subscribed, the gross proceeds are estimated to be approximately HK$106 million, with net proceeds after expenses amounting to about HK$101 million. The company intends to allocate the net proceeds as follows: (i) Approximately 96.0% (about HK$97.4 million) will be used to repay convertible bonds, interest-bearing bank loans, other borrowings, and other payables and accrued expenses of the group. (ii) Approximately 1.80% (about HK$1.8 million) will be allocated for the acquisition of property development projects in China with strong growth and value potential, aiming to diversify the group's property portfolio and enhance future overall revenue and profitability. (iii) Approximately 2.20% (about HK$2.2 million) will be reserved for the group's general working capital, covering daily operational expenses for the 12 months following the completion of the rights issue.
Should the rights issue be under-subscribed, the net proceeds will be allocated proportionally according to the stated uses.