Honghao International (08375.HK) announced that it proposes to implement a share merger on the basis of merging every five existing shares into one consolidated share, and after the merger takes effect, it will issue a rights issue on the basis of one rights share for every two consolidated shares held, at a price of 0.21 yuan per share, which is about 40.8% off the pre-theoretical closing price of 0.355 yuan after taking into account the impact of the share merger.
A total of 96 million shares were issued, with a total proceeds of about $20.2 million and a net amount of about $18.7 million, which is expected to be used for upgrading equipment and machinery to enhance production and operational efficiency, repayment of bank loans and general working capital.