According to Zhitong Financial App, Yichen Group (08365) announced that the board of directors intends to submit a proposal for a share merger to shareholders, which involves merging existing issued and unissued shares with a face value of HK$0.01 per 25 shares into a consolidated share with a face value of HK$0.25 per share.
As of the date of this announcement, the authorized share capital of the company was HK$20 million, divided into 2 billion existing shares with a face value of HK$0.01 per share. Of these, 892 million existing shares have been issued and paid or recorded as full. Assuming that no further shares have been issued or repurchased between the date of this announcement and the date of the Extraordinary General Meeting of Shareholders, immediately after the share merger takes effect, the authorized share capital of the company will be HK$20 million, divided into 80 million consolidated shares with a face value of HK$0.25 per share, of which 356.814 million consolidated shares (paid or recorded as fully paid) will have been issued.
As of the date of this announcement, existing shares were traded on the Stock Exchange at 5,000 existing shares per lot trading unit. The board of directors recommended that after the share consolidation takes effect, the trading unit for each lot traded on the Stock Exchange be changed from 5,000 existing shares to 2,000 consolidated shares.
On October 6, 2023, the company (buyer) and seller Leading Star Ventures Limited entered into a sales agreement. The seller conditionally agreed to sell and the buyer conditionally agreed to buy the sales shares (equivalent to about 13.5% of the shares in the target company Quest Centurion Limited) at a cost of HK$57.9589 million.
The target company holds all of GoGoChart's shares. GoGoChart is mainly engaged in providing a full range of digital marketing services. As of the date of this announcement, the seller owned an interest in approximately 13.5% of the shares of the target company.
According to the terms of the purchase and sale agreement, the company will issue convertible notes with a total principal amount of HK$30 million to the seller (or its nominee) after completion of the acquisition as part of the cost.
Assuming that the company will not issue or repurchase shares from the date of this announcement, the company will issue and distribute a total of 15 million shares in exchange after the conversion rights attached to the convertible stock note have been fully exercised at the exchange price, which is equivalent to about 42.04% of the company's issued share capital at the date of this announcement (assuming the share merger takes effect) and about 29.60% of the company's issued share capital after the expansion of the issuance and allocation of shares issued and allotted for exchange shares (assuming the share consolidation takes effect).
To facilitate strategic business cooperation between the Group and the target company, on October 6, 2023, the company and GoGoChart entered into a non-legally binding memorandum of understanding on strategic cooperation to seek financing for target companies and for GoGoChart to seek other institutional financing activities.
In considering the benefits of the acquisition, the directors also considered the Memorandum of Cooperation between GoGoChart and EWTP Arabia Technology Innovation Fund GP II Limited (controlled by Saudi Arabia's key investment institution eWTP Arabia Capital). In order to strengthen economic and trade exchanges between the HKSAR and Middle Eastern countries, promote resource sharing, and form joint development forces, the contracting parties agreed to use eWTP's resources, experience and expertise in the Kingdom of Saudi Arabia and The combination of GoGoChart's industry strengths and a comprehensive advertising platform driven by artificial intelligence has expanded GoGoChart's business in the Kingdom of Saudi Arabia.