China Huajun Group Limited announced a proposal to convert HK$94.00 million of outstanding debt into equity through the issuance of 94.00 million new shares to creditor Vpoint Limited at HK$1.00 per share.
The Capitalisation Shares equal 100.54% of the company’s existing share capital and 50.14% of the enlarged share base. The Issue Price represents discounts of 21.90% to the HK$1.28 last-traded price on 18 June 2026, 26.50% to the five-day average close of HK$1.36, and 44.40% to the HK$1.80 close on 31 July 2026.
On completion, Vpoint Limited—wholly owned by Mr Li Gang—will become the controlling shareholder with a 50.14% stake. As this would normally trigger a mandatory general offer under the Takeovers Code, the company is applying for a Whitewash Waiver. The waiver requires approval from at least 75% of votes cast by independent shareholders, while over 50% must endorse the debt capitalisation itself.
The transaction aims to lower leverage and eliminate future interest expenses without cash outflow. As at 31 December 2025 the group carried net liabilities of RMB7.70 billion and faced auditor disclaimers over going-concern uncertainties.
Following recent placements and scheme share issues, public float was 33.36% (31.19 million shares) as at 31 July 2026. Post-conversion, public float is expected to be 25.69% (48.17 million shares), remaining above the regulatory minimum.
The board’s independent non-executive directors—Mr Mok Yi Kwo, Mr Ding Xingfu and Ms Zhu Fang—form an Independent Board Committee. Grand Moore Capital Limited has been appointed as the independent financial adviser.
A special general meeting will be held on 26 August 2026 at 10:00 a.m. in Hong Kong. Shareholders registered by 20 August 2026 are eligible to vote. If approved and all conditions—including Stock Exchange listing approval—are met, completion is expected within seven business days thereafter.
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