Zhengwei Group Holdings Company Limited has announced two concurrent capital actions:
1. Authorised Share Capital • Proposal to increase authorised share capital from USD80.00 million (400 million shares) to USD160.00 million (800 million shares) by creating 400 million additional shares at USD0.2 par value. • Subject to ordinary-resolution approval at an extraordinary general meeting (EGM).
2. Rights Issue (Non-Underwritten) • Basis: six rights shares for every one existing share held on the record date (17 September 2026). • Subscription price: HK$0.40 per rights share, a 28.57% discount to the last closing price of HK$0.56 and a 92.87% discount to the unaudited net asset value per share of HK$5.61 as at 31 December 2025. • Shares in issue now: 67.20 million. • Maximum new shares: 403.20 million, expanding total issued shares to 470.40 million and enlarging the share base by 600.00%. • Gross proceeds: up to HK$161.28 million; estimated net proceeds: HK$160.43 million. • No excess application; any unsubscribed or non-qualifying portions will be placed on a best-effort basis by CNI Securities Group Limited. • Theoretical dilution effect: 24.49%.
3. Use of Proceeds • 100% of estimated net proceeds (HK$160.43 million) earmarked to repay outstanding bank borrowings. • As at 31 December 2025, the group reported RMB8.54 million cash, RMB200.00 million short-term bank debt and a gearing ratio of 61.57%. Debt was drawn mainly to fund a refundable RMB150.00 million deposit with a PRC state-owned import agent to secure chicken-feet supply.
4. Shareholding Impact • Current largest beneficial interests (Mr. Yang Shengyao and associates): 21.08%. • Post-rights, assuming full take-up, their stake remains 21.08%; if they decline entirely and all unsubscribed shares are placed, their holding would dilute to 3.01%.
5. Governance and Timetable • Rights issue will enlarge issued share capital by more than 50%; therefore, minority shareholder approval is required under Listing Rules 7.19A(1) and 7.27A(1). • An Independent Board Committee of three INEDs has been formed; an independent financial adviser will opine on the transaction. • Circular expected 21 August 2026; prospectus expected 18 September 2026. Nil-paid rights trading is scheduled for 22 – 29 September 2026; latest acceptance 5 October 2026; fully-paid shares begin trading 5 November 2026.
6. Rationale The board cites the need to deleverage, reduce interest expenses, and strengthen the balance sheet. Alternative funding options such as additional bank loans or private placements were deemed less attractive due to higher gearing or immediate dilution without shareholder participation.
Shareholders and potential investors are advised to exercise caution when dealing in the company’s securities until the rights issue becomes unconditional.
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