ANCHORSTONE (01592) plans to increase its authorized capital to HK$400 million, with a discount of approximately 42.86%, by issuing new shares on a "1 for 4" basis.

ANCHORSTONE (01592) announce that the board of directors proposes to seek approval from shareholders at a special general meeting to approve the increase of the authorized share capital from HK$50 million (divided into 500 million shares) to HK$400 million (divided into 4 billion shares) by way of the issuance of an additional 3.5 billion new shares of HK$0.1 each. All shares will have equal rights in all respects. The increase in authorized share capital will come into effect on the date of the special general meeting upon approval by shareholders. The board recommends that for every 1 existing share held on the record date, shareholders are entitled to subscribe for 4 Rights Shares at a subscription price of approximately 42.86% discount to the subscription price of HK$0.105 per Rights Share, with a maximum of around 1.158 billion Rights Shares to be issued for a total amount of approximately HK$121.6 million (before expenses and offset arrangements) (assuming no change in the issued share capital of the Company from the date of this announcement to the record date). The estimated net proceeds from the Rights Issue (taking into account the effect of offsetting and deducting related expenses) will not exceed approximately HK$62.5 million (assuming no change in the issued share capital of the Company from the date of this announcement to the record date and assuming all eligible shareholders fully subscribe for their respective allocations in the Rights Issue). Approximately HK$41.2 million will be used to repay overdue bank loans and associated interests; approximately HK$13.1 million will be used to repay the remaining balance of shareholder loans post offsetting; approximately HK$7.7 million will be used to repay outstanding trade and other payables; and the remaining approximately HK$0.5 million will be allocated for general working capital of the group, including day-to-day salaries, office administrative expenses, and sales and distribution expenses.