Ta Yang Group Announces Capital Reorganisation and HK$275 Million Two-for-One Rights Issue

Ta Yang Group has unveiled a two-step plan to strengthen its balance sheet and fund expansion of its digital marketing and AI initiatives.

The board proposes a Capital Reorganisation that will: 1. Reduce the par value of each issued share from HK$1.00 to HK$0.10, creating an estimated HK$154.81 million credit to offset accumulated losses. 2. Subdivide each unissued HK$1.00 share into ten new shares of HK$0.10, keeping authorised capital at HK$2.00 billion but increasing authorised shares to 20.00 billion.

Subject to shareholder and regulatory approval, this will be followed by a non-underwritten Rights Issue of up to 344.01 million new shares (or 375.14 million if all outstanding convertible bonds are converted) on the basis of two rights shares for every one new share held. The subscription price is set at HK$0.80 per rights share, a 2.44% discount to the last trading price of HK$0.82 on 4 February 2026 and a 1.88% discount to the theoretical ex-rights price.

Gross proceeds are estimated at up to HK$275.21 million (or HK$300.11 million with full bond conversion), while net proceeds are projected at HK$274.48 million (or HK$299.38 million). The company intends to deploy approximately: • 42.10% for AI Digital Human computing infrastructure. • 25.60% for data training. • 8.20% for specialist recruitment and related staffing. • 23.80% for general working capital and debt repayment (including HK$33.00 million for loan and interest settlement).

Key timetable highlights include: • EGM: 6 November 2026. • Capital Reorganisation effective: on or before 16 November 2026. • Record Date for Rights Issue: 25 November 2026. • Prospectus despatch: 26 November 2026. • Nil-paid rights trading: 30 November – 7 December 2026. • Final acceptance and payment deadline: 10 December 2026. • Expected listing of fully-paid rights shares: 28 December 2026.

The Rights Issue has no minimum subscription level. Applications will be scaled down if acceptances would trigger a mandatory general offer or breach the 25% public-float requirement.

Shareholder Lyton Maison Limited (46.33% stake), controlled by Chairlady Shi Qi, and its associates will abstain from voting on the Rights Issue. An Independent Board Committee has appointed Frontpage Capital as adviser to evaluate the terms for minority shareholders.

Ta Yang notes a pending winding-up petition related to outstanding convertible bonds; the High Court has adjourned the hearing to 26 October 2026 and ordered a HK$20 million security payment. Legal counsel advises that no validation order is needed for the share issuance.

The company estimates Rights Issue expenses at HK$0.73 million and will apply for listing of the nil-paid and fully-paid rights shares on the Stock Exchange.