Landing International Development Ltd – a mainland China real estate developer that is pursuing a foreigner-only casino resort project on Jeju Island, South Korea – is proposing to implement a capital reorganisation. It entails a capital reduction and a rights issue on the Hong Kong Stock Exchange, according to a Monday filing.
The estimated net proceeds of the rights issue will be not less than approximately HKD5.07 billion (US$653.7 million), the company said.
According to the latest filing, the exercise involves the reduction of the issued share capital of Landing International Development through a cancellation of the paid-up capital of the company to the extent of HKD0.09 on each of the issued ordinary shares of HKD0.10 each, meaning the nominal value of each issued new share will be HKD0.01. Landing International Development had a total of 20,565,879,257 issued shares as of the date of the announcement.
The firm said that the HKD1.85 billion arising from the capital reduction will be credited to the surplus account of the company and could be used to “set off accumulated losses of the company”. It additionally said that it could also “facilitate the payment of dividends as and when the directors consider it appropriate in the future”.
Landing International Development said earlier this month that it expects its annual net loss to widen in the 2016 reporting period. The Hong Kong-listed firm’s 2015 net loss was approximately HKD987.97 million.
Subject to the capital reorganisation becoming effective, Landing International Development said it would implement the rights issue on the basis of five rights shares for every one new share held on the record date – March 14, 2017 – at the subscription price of HKD0.05 per rights share. The company expects to raise net proceeds of approximately HKD5.07 billion by issuing 102.829 billion rights shares.
The rights issue is fully underwritten by Kingston Securities Ltd and Landing International Ltd, the latter a company wholly owned by Yang Zhihui. Mr Yang is also an executive director and chairman of Hong Kong-listed Landing International Development. Following the rights issue, Mr Yang’s Landing International will own 75-percent of the shares of the Hong Kong-listed entity.
According to Monday’s filing, Landing International has granted to Landing International Development loans in the aggregate amount of approximately HKD5.54 billion, which were used to finance the company’s expansion into the gaming industry.
Landing International Development said in a January 3 filing it now has 100-percent control of the foreigner-only casino project on Jeju mentioned in previous filings. In 2016, the company acquired Les Ambassadeurs Club and Casino, an upmarket gaming venue in London in the United Kingdom.
On Monday, the Hong Kong-listed firm said the net proceeds from the rights issue will be used to repay approximately HKD4.27 billion to Landing International. The remaining proceeds – of about HKD796 million – will be used as working capital and/or to finance any future investment opportunities, said Landing International Development.
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Estimated investment cost for the whole Jeju Shinhwa World project being developed by Hong Kong-listed Landing International Development