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Shin Hwa World to raise $39.6M via rights issue

Hong Kong-listed casino developer Shin Hwa World Ltd has announced a series of capital reorganization measures, including plans to raise HK$263.7 million ($39.6 million) via a rights issue.

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

Jeju Shinhwa World, South Korea
Jeju Shinhwa World, South Korea

According to the filing to the Hong Kong Stock Exchange, Shin Hwa said that the capital reorganization will also include a share consolidation “whereby every 10 existing shares of HKD0.01 each will be consolidated into one HKD0.10 share”.

Next, there will be a capital reduction, wherein the issued share capital of each shareholder will be rounded down to the nearest whole number by canceling any fractional shares. All credits resulting from this process will be transferred to the company’s ‘surplus account.’

With approximately 5.07 billion existing shares in circulation as of the Thursday announcement, Shin Hwa World Ltd anticipates generating a surplus of roughly HK$45.6 million ($5.8 million) through the capital reduction.

After announcing the capital reorganization, Shin Hwa’s stock recorded a sharp drop of nearly 18 percent on Friday.

It’s worth recalling that Shinhwa World’s major shareholder Yang Zhihui was investigated by the China Securities Regulatory Commission for suspected manipulation of the securities market in December 2020 and resigned as a director of Shin Hwa in June 2023.

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