Shin Hwa World announces capital reorganisation and rights issue
Jeju Shinhwa World plans to raise HK$309.3m.
South Korea.- Shin Hwa World Limited, the former Landing International Development, has announced a capital reorganisation and follow-up rights issue, aiming to raise about HK$309.3m (US$39.5m). The company will consolidate every ten shares worth HK$0.01 into one share worth HK$0.10. It will reduce the share capital of each shareholder to the nearest whole number and transfer any remaining credits to the company’s surplus account.
The company expects to generate a surplus of HK$45.6m based on the approximately 5.07bn existing shares. Once the capital reorganisation and share consolidation are effective, the company plans to implement a rights issue offering two rights shares for every one adjusted share at a subscription price of HK$0.26 per rights share.
The company expects the rights issue will provide an opportunity to strengthen its financial position, relieve its financial burden, and provide working capital without adding interest. Shin Hwa World said it intends to use approximately HK$100m of the estimated net proceeds for maintenance, renovation and upgrade of facilities in Jeju Shinhwa World, including but not limited to a water supply construction for the development of the casino venue.
Approximately HK$73m will be used for the development of the Resort Business and Gaming Business of the Group such as service enhancement, supply chain management, human resources development as well as sales and marketing activities. In addition, HK$50m will be used for interest expenses while the remaining HK$35.6m will be used for general working capital of the company such as staff costs, utilities expenses and other general operating expenses.
In March, the company raised HK$28.74m (US$3.67m) through a share subscription agreement. It issued 845.25 million subscription shares at HK$0.034 per share.
The casino operator said proceeds were going to be used to upgrade, repair and maintain the building, equipment and facilities at Jeju Shinhwa World (approximately HK$14m), to pay off interest expenses (HK$10m), for sales and marketing (HK$4.5m) and general working capital.
