GOME Retail Mulls Equity Issue to Settle 337 Million Yuan Debt; Shares Jump 27%

MT Newswires Live12:50

GOME Retail (HKG:0493) said it plans to allot and issue over 25.1 billion shares at HK$0.015 each under a specific mandate to settle outstanding payables of roughly 336.8 million yuan, according to a Jan. 16 Hong Kong bourse filing.

Shares of the electrical appliance retailer were up nearly 27% in Monday's midday trade.

Under the proposed arrangements, GOME will issue more than 21.6 billion shares to Jinboding Investment Management, the nominee of Shanghai Jinboding Enterprise Services, to settle a debt of 290 million yuan owed by the group.

Separately, the company will issue nearly 3.49 billion shares to China Science TaiYue Technology to settle payables of 46.8 million yuan.

The debt will be discharged in full through the share allotments, with no cash proceeds to be received by the group.

The subscription shares represent about 52.4% of GOME's existing issued share capital and around 34.4% of the enlarged share capital upon completion, assuming no other changes, the filing said.

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