According to the announcement of China Union Development Holdings (00264.HK) on October 13, 2023, the placing agent entered into a placing agreement with the company, in which the company intends to place a maximum of 30 million placing shares, equivalent to about 7.84% of the existing issued shares, and to expand about 7.27% of the issued share capital through allotment. The placing price of each placing share is HK $0.45, which is about 15.09% off the closing price of HK $0.53 per share on the date of the placing agreement.
It is expected that the total and net proceeds from the placing will be approximately HK $13.5 million and HK $13.2 million respectively. The Company intends to use the net proceeds from the placing for the following purposes: (I) expansion of production capacity; (ii) enhancement of research and development capabilities; (iii) repayment of loans; and (iv) provision of general working capital and enhancement of the Group's financial position.
The Directors consider that the placing is a good opportunity to raise additional funds through the stock market and will enhance the financial position of the Group.