WLS HOLDINGS (08021) announced that its board of directors has proposed a capital reorganization. The plan involves a share consolidation, capital reduction, share subdivision, and a reduction of the share premium account.
The specific steps are as follows: (i) A share consolidation, where every forty (40) issued and unissued existing shares with a par value of HK$0.01 each will be consolidated into one (1) consolidated share with a par value of HK$0.40 each. Any fractional shares resulting from the consolidation will be cancelled.
(ii) Following the consolidation, a capital reduction will take effect. This will reduce the company's issued share capital by: (a) cancelling any fractional consolidated shares, rounding down the total number of consolidated shares to the nearest whole number; and (b) cancelling HK$0.39 per share from the par value of each issued consolidated share, thereby reducing it from HK$0.40 to HK$0.01 per share. This will cancel paid-up capital of the company.
(iii) Subsequent to the consolidation, a share subdivision will be enacted. Each authorized but unissued consolidated share will be subdivided into forty (40) adjusted shares with a par value of HK$0.01 each. Following the completion of the capital reorganization, the company's authorized share capital will be HK$400 million, divided into 40 billion adjusted shares.
(iv) After the capital reduction and subdivision, a reduction of the share premium account will occur. The entire credit balance in the share premium account will be reduced to zero.
(v) Following the share premium reduction, the total sum of approximately HK$700 million arising from the capital reduction (approximately HK$140 million) and the share premium reduction (approximately HK$560 million) will be transferred to the company's contributed surplus account. These funds will be used entirely to offset the company's accumulated losses. Alternatively, the board may apply the funds as permitted by the company's articles of association and Bermuda law, without requiring further shareholder approval.
The board also proposes a rights issue following the capital reorganization. Eligible shareholders on the record date will be entitled to subscribe for 1 rights share for every 1 adjusted share held, at a subscription price of HK$0.24 per rights share. The company aims to raise up to approximately HK$86.2 million (before expenses) by issuing up to 359,177,526 rights shares. This calculation assumes no change in the total number of issued shares between the announcement date and the record date, apart from changes due to the capital reorganization.
The net proceeds, estimated to be up to approximately HK$83.2 million, are intended to be used for repaying group borrowings and for general working capital purposes.
Additionally, on February 6, 2026 (after trading hours), the company entered into a placement agreement with a placing agent. Under this agreement, the placing agent has conditionally agreed to use its best efforts to procure subscribers for any unsubscribed rights shares and any rights shares not taken up by excluded shareholders.