Madison Holdings (08057) plans to increase its statutory share capital and consolidate its shares on a "10 to 1" basis, followed by a rights issue on a "2 for 3" basis.

MADISON HLDG (08057) announces that the board of directors proposes to increase the authorized share capital of the company from HKD 10 million (divided into 1 billion existing shares) to HKD 20 million (divided into 2 billion existing shares) by adding 1 billion new shares. Subject to the increase in authorized share capital taking effect, the board proposes to implement a stock consolidation, whereby every 10 existing shares with a nominal value of HKD 0.01 each (issued and unissued) will be consolidated into 1 share with a nominal value of HKD 0.10 each. The stock consolidation will only take effect after approval by the shareholders at a special general meeting. The company proposes to conduct a rights issue to eligible shareholders on the record date, with a ratio of 3 new shares for every 2 consolidated shares held, at a subscription price of HKD 0.486 per new share. A total of 93.469 million new shares will be issued through the rights issue, raising approximately HKD 45.43 million (before expenses) assuming no new issuance or repurchase of shares before the record date. The net proceeds from the rights issue are estimated to be around HKD 42.79 million. The company intends to use the net proceeds to repay outstanding loans and for general working capital of the group.