ZHONGZHENG INTL (00943) plans to conduct a share consolidation, reduce share premiums, change the trading unit, capitalize debt, and conduct a rights issue.

ZHONGZHENG INTL (00943) announced that the board of directors proposed plans including: share consolidation; reduction in share premium; change in trading units per lot; debt capitalization; and rights issue. Upon completion of the plans, it is expected that the Group's liabilities will be reduced through debt capitalization, and new capital will be raised through the rights issue. Overall, the financial position of the Group is expected to improve. In addition, it is expected that the trading price of shares and the value of trading units per lot will increase after the share consolidation and change in trading units, thus ensuring compliance with trading rules. The board of directors proposed to consolidate every 20 shares of existing and unissued shares with a par value of HK$0.00004 into 1 share of consolidated shares with a par value of HK$0.0008. As of the date of this announcement, the Company's authorized share capital is HK$1 billion, divided into 250 billion shares of existing shares with a par value of HK$0.00004, of which 12.824 billion shares of existing shares have been issued and fully paid. Assuming no further issuance or repurchase of existing shares from this date to the date of the extraordinary general meeting of shareholders, immediately after the share consolidation but before the completion of debt capitalization and rights issue, the Company's authorized share capital will be HK$1 billion, divided into 125 billion shares of consolidated shares with a par value of HK$0.0008, of which 6.41 billion shares of consolidated shares will be issued. The board of directors proposed to change the trading unit from 8000 shares of existing shares to 16000 shares of consolidated shares. After the trading session on May 15, 2025, the Company entered into Debt Capitalization Agreement I with Subscriber I, under which the Company agreed to issue and distribute Capitalization shares at HK$0.20 per share, and Subscriber I agreed to subscribe for 289.6 million Capitalization shares; and the Company entered into Debt Capitalization Agreement II with Subscriber II, under which the Company agreed to issue and distribute Capitalization shares at HK$0.20 per share, and Subscriber II agreed to subscribe for 215 million Capitalization shares. The total amount of the Capitalization issuance price of approximately HK$100.9 million will offset all shareholder loans owed to Subscriber I or part of the shareholder loans owed to Subscriber II on an equal basis. Assuming no issuance of new existing shares or consolidated shares from the date of the debt capitalization agreements to the completion date of the debt capitalization, the Capitalization shares will account for approximately 78.7% of the issued share capital of the Company after the share consolidation takes effect; the issued share capital of the Company will be approximately 44.0% after the issuance of Capitalization shares; and the issued share capital of the Company will be approximately 29.4% after the issuance of Capitalization shares and Rights Issue shares. After the debt capitalization is completed, the Company proposes to issue 1 Rights Issue share for every 2 consolidated shares (including Capitalization shares to be issued and distributed under the debt capitalization) held on the record date, with a Rights Issue price of HK$0.20 per share, to raise up to approximately HK$114.6 million from eligible shareholders. After deducting expenses, the net proceeds from the Rights issue are estimated to be approximately HK$112 million.