Continental Aero Tech Holding (00232) has announced a proposed capital restructuring initiative. As of the announcement date, the company's authorized share capital stands at HK$1 billion, divided into 10 billion shares with a par value of HK$0.10 each, of which 9.303 billion shares have been issued and fully paid or credited as fully paid.
The board of directors has recommended a multi-step capital reorganization, which includes several key components. First, a capital reduction will be implemented by canceling HK$0.095 of paid-up capital per issued share, thereby reducing the par value of each outstanding share from HK$0.10 to HK$0.005.
Second, subject to and conditional upon the effectiveness of the capital reduction, the company will proceed with a reduction and increase of its authorized capital. This involves canceling all authorized but unissued shares, including those arising from the capital reduction, followed by an immediate increase of the authorized share capital to HK$50 million. This will be achieved by creating a sufficient number of additional new shares, bringing the total to 10 billion new shares.
Third, a share premium reduction will be implemented, whereby the entire credit amount in the company's share premium account will be canceled. Fourth, the credits arising from both the capital reduction and the share premium reduction will be transferred to the contributed surplus account under the Companies Act. This will authorize the board to utilize all or part of the contributed surplus in any manner permitted by Bermudian law and the company's articles of association as amended from time to time, without requiring further shareholder approval. Such uses may include, but are not limited to, funding the special dividend for the disposal in full or in part, and making any further distributions to shareholders as the board deems appropriate.
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