MADISON HLDG (08057) announced that its board of directors has recommended increasing the company's authorized share capital. The proposal involves creating 1 billion new shares, which would raise the authorized capital from HKD 10 million (comprising 1 billion shares) to HKD 20 million (comprising 2 billion shares).

Subject to the approval of the capital increase, the board also proposes a share consolidation. Under this plan, every 10 issued and unissued existing shares with a par value of HKD 0.01 each will be consolidated into one consolidated share with a par value of HKD 0.10. The share consolidation is conditional upon, among other things, approval from shareholders at an extraordinary general meeting.

Following the consolidation, the company intends to launch a rights issue to raise funds. The proposal is to issue 93.469 million rights shares on the basis of 3 rights shares for every 2 consolidated shares held by eligible shareholders on the record date. The subscription price is set at HKD 0.486 per rights share. This is expected to raise approximately HKD 45.43 million before expenses, assuming no new shares are issued or repurchased before the record date. The net proceeds from the rights issue are estimated to reach a maximum of approximately HKD 42.79 million.

The company plans to use the net proceeds from the rights issue to repay outstanding loans and for the group's general working capital purposes.