GGRAsia – Shin Hwa capital rejig effective on June 17: firm

Shin Hwa capital rejig effective on June 17: firm

Jun 14, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck

Hong Kong-listed casino developer Shin Hwa World Ltd says the group’s capital reorganisation will become effective on Monday (June 17), after its shareholders nodded the deal at a special general meeting on Thursday.

“Dealings in the adjusted shares on the [Hong Kong] Stock Exchange will commence at 9am on Monday, 17 June 2024,” stated the firm in a Thursday filing.

The company’s proposed rights issue, aiming to raise about HKD309.3 million (US$39.5 million), has also been approved by shareholders.

Shin Hwa World Ltd is the promoter of Jeju Shinhwa World (pictured), a complex with a foreigner-only casino in Jeju, South Korea.

The group’s capital reorganisation, announced in April, includes a share consolidation “whereby every 10 existing shares of HKD0.01 each … will be consolidated into one HKD0.10 share”.

This will be followed by a capital reduction in which the issued share capital of each shareholder “will be rounded down to the nearest whole number by cancelling any fraction of a consolidated share,” with all the credits arising from the exercise to be transferred to the “surplus account” of the company.

Based on just above 5.07 billion existing shares in issue, Shin Hwa World Ltd expects to generate a surplus of about HKD45.6 million from the capital reduction.

Once the capital reorganisation and share consolidation become effective on Monday, the casino firm will implement a rights issue on the basis of two rights shares for every one adjusted share held on the record date, at a subscription price of HKD0.26 per rights share.

The company said it expects to raise up to HKD263.7 million before expenses by way of issuing up to 1.01 billion rights shares. It estimates there will be net proceeds of HKD258.6 million, according to the filing.

SR Wealth Securities Ltd, described as an independent third party, has been identified as the underwriter in relation to the rights shares.

In a previous filing, Shin Hwa World Ltd said that about HKD100 million of the estimated net proceeds from the rights issue would be used “for maintenance, renovation and upgrade of facilities in Jeju Shinhwa World”.

Circa HKD73.0 million would be channelled for the development of the group’s resort and gaming businesses, “such as service enhancement, supply chain management, [and] human resources development as well as sales and marketing activities,” said the firm.

The company reported a consolidated net loss of HKD522.4 million for full-year 2023, on revenue that declined by 25.3 percent year-on-year, to just under HKD1.04 billion.