ZHENGWEI GROUP (02147) proposes to implement a capital reduction and share subdivision.

ZHENGWEI GROUP (02147) announces that as at the date of this announcement, the authorized share capital of the Company is US$160 million, divided into 800 million shares of US$0.2 each, of which 470.4 million existing shares are issued and fully paid or credited as fully paid. The Board proposes to implement the capital reduction and subdivision as follows: (i) reduce the par value of each issued share from US$0.2 to HK$0.01 per new issued share by cancelling the paid-up capital of approximately HK$1.55 per issued share; (ii) apply the credit arising from the capital reduction to offset the accumulated losses of the Company as at the effective date of the capital reduction (Accumulated Losses) in such manner as is permitted by all applicable laws and the memorandum and articles of association of the Company and as the Board considers appropriate; (iii) immediately following the capital reduction, subdivide each authorized but unissued share of US$0.2 each into 156 new shares of HK$0.01 each; and (iv) the new shares arising from the capital reduction and subdivision shall rank pari passu in all respects with each other and shall have the rights and privileges and be subject to the restrictions set out in the memorandum and articles of association of the Company. The proposed capital reduction and subdivision will reduce the par value of the shares from US$0.2 per share to HK$0.01. 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 Board believes that the proposed capital reduction will provide the Company with greater flexibility to declare dividends and/or undertake any corporate activities requiring the use of distributable reserves in the future, subject to the future results of the Company and the timing considered appropriate by the Board. Accordingly, the Directors are of the view that the capital reduction and subdivision are in the overall interests of the Company and its shareholders. Shareholders should note that, at this stage, even if the capital reduction and subdivision have become effective, there is no assurance that dividends will be declared or paid in the future, or that the Company will issue new shares. Apart from applying the credit arising from the capital reduction to offset the Accumulated Losses of the Company and the expenses arising from the capital reduction and subdivision, the Directors are of the view that the capital reduction and subdivision will not have any impact on the underlying assets, business operations, management or financial position of the Company or the proportionate interests of shareholders in the Company.