LAI GROUP (08455) has announced that the board has proposed a capital reorganization, which includes the following components.
(1) Proposed share consolidation, under which every 20 issued and unissued existing shares of HK$0.01 each will be consolidated into 1 consolidated share of HK$0.20 each.
(2) Proposed capital reduction and subdivision, to be implemented immediately after the share consolidation as follows: (i) capital reduction, whereby (a) any fractional consolidated shares arising from the share consolidation in the company's issued share capital will be aggregated and, if possible, sold, with the benefits accruing to the company, and (b) the par value of each issued consolidated share will be reduced from HK$0.20 to HK$0.01 by cancelling HK$0.19 of the paid-up capital of each issued consolidated share, so that after such reduction, each issued consolidated share will become one adjusted share of HK$0.01 each; (ii) the credit arising from the capital reduction will be applied to offset the company's accumulated losses as at the effective date of the capital reduction, thereby reducing the company's accumulated losses. Any balance of the credit will be transferred to the company's distributable reserve account and applied for purposes permitted by all applicable laws and the company's memorandum and articles of association and as the board considers appropriate; and (iii) immediately after the capital reduction becomes effective, each authorized but unissued consolidated share will be subdivided into 20 authorized but unissued adjusted shares of HK$0.01 each.
As at the date of this announcement, 960 million existing shares have been issued and are fully paid or credited as fully paid. Assuming no further issuance or repurchase of existing shares from the date of this announcement up to and including the effective date of the capital reorganization, the company's authorized share capital will be HK$20 million, divided into 2 billion adjusted shares of HK$0.01 each, of which 48 million adjusted shares will be issued and fully paid or credited as fully paid.
The board announces that, upon the capital reorganization becoming effective, the board lot size for trading existing shares on the Stock Exchange will be changed from 10,000 existing shares to 5,000 adjusted shares. After the change in board lot size takes effect, shareholders may submit their existing share certificates for every 10,000 existing shares to the share registrar in exchange for new share certificates for every 5,000 adjusted shares, at the company's expense.
The board proposes that, upon the capital reorganization and the change in board lot size becoming effective (among other things), the company's authorized share capital be increased from HK$20 million (divided into 2 billion adjusted shares of HK$0.01 each) to HK$200 million (divided into 20 billion adjusted shares of HK$0.01 each) by creating an additional 18 billion unissued adjusted shares of HK$0.01 each.
The board proposes that, upon the capital reorganization and the increase in authorized share capital becoming effective (among other things), a rights issue be implemented on the basis of two (2) rights shares for every one adjusted share held on the record date, at a subscription price of HK$0.34 per rights share (after the capital reorganization becomes effective), to raise gross proceeds of approximately HK$32.6 million (before expenses) by offering up to 96 million rights shares (after the capital reorganization becomes effective) to qualifying shareholders (assuming there is no other change in the number of issued shares on or before the record date other than the capital reorganization). Assuming full subscription, the estimated net proceeds (after deducting costs and expenses relating to the rights issue) will be approximately HK$31 million (assuming the company does not further issue new shares or repurchase shares on or before the record date).
The company intends to use the net proceeds from the rights issue as follows: (i) approximately HK$26.7 million for staff costs and directors' remuneration over the next 24 months; and (ii) approximately HK$4.3 million for (a) professional fees (including listing expenses, auditor's remuneration and legal fees) and (b) other office-related expenses over the next 24 months.
On 7 October 2026 (after trading hours), the company entered into a placing agreement with the placing agent, pursuant to which the placing agent has conditionally agreed, on a best-efforts basis, to procure placees to subscribe for the unsubscribed rights shares and the rights shares not sold by excluded shareholders.
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