JU FU TANG BIOT (08217) plans to implement a share capital reorganization and a rights issue on a "1-for-3" basis.

JU FU TANG BIOT (08217) announces that the board recommends the implementation of a share capital reorganization, which comprises the following: (1) Share consolidation, whereby every 5 issued and unissued existing shares of HK$0.160 each will be consolidated into 1 consolidated share of HK$0.800 each. Any fractional entitlements to consolidated shares arising from the share consolidation will not be allotted to the relevant shareholders but will be aggregated and, where possible, sold, with the proceeds retained for the company; (2) Capital reduction, whereby immediately following the share consolidation becoming effective, the par value of each issued consolidated share will be reduced from HK$0.800 to HK$0.016 by cancelling HK$0.784 of paid-up share capital of each issued consolidated share of the company; (3) Subdivision, whereby immediately following the capital reduction, the authorized but unissued consolidated shares of HK$0.800 each in the authorized share capital of the company will be subdivided into 50 authorized but unissued adjusted shares of HK$0.016 each; (4) Immediately following the subdivision becoming effective, the authorized share capital of the company will be increased from HK$32.668 million to HK$80 million by creating an additional 2.958 billion adjusted shares of HK$0.016 each, such that the authorized share capital of the company will be HK$80 million, divided into 5 billion adjusted shares of HK$0.016 each; (5) The credit arising from the capital reduction will be applied to offset the accumulated losses of the company as at the effective date of the capital reduction, thereby reducing the accumulated losses of the company. The balance of the credit (if any) will be transferred to the distributable reserve account of the company and applied in such manner as permitted by all applicable laws and the memorandum and articles of association of the company, and as the board considers appropriate. The board recommends a rights issue on the basis of 3 rights shares for every 1 adjusted share held on the record date, at a subscription price of HK$0.32 per rights share, to raise gross proceeds of approximately HK$58 million before expenses by way of offering up to 181 million rights shares to qualifying shareholders (assuming there is no other change in the number of issued shares on or before the record date, except those arising from the share capital reorganization becoming effective), with estimated net proceeds of approximately HK$55.7 million. The company intends to apply the net proceeds from the rights issue for (i) full repayment of the outstanding principal and accrued interest under the bonds of approximately HK$16.2 million; and (ii) working capital for existing businesses of approximately HK$39.5 million, including approximately HK$9.5 million for general corporate expenses, approximately HK$20 million for the civil engineering and fitting-out works segment, and approximately HK$10 million for the health technology business segment. The rights issue is also expected to improve the company's cash position and strengthen its financial capability to support its existing operations and future business development.