LAI GROUP (08455): Proposed Implementation of Capital Reorganization

LAI GROUP (08455) announces that the Board proposes to implement a capital reorganization, which comprises the following: (1) Proposed Share Consolidation The basis of the Share Consolidation is that every 20 issued and unissued existing shares of HK$0.01 each be consolidated into 1 consolidated share of HK$0.20 each. (2) Proposed Capital Reduction and Subdivision Immediately following the Share Consolidation, the Capital Reduction and Subdivision will be implemented as follows: (i) the Capital Reduction, whereby (a) any fractional consolidated shares in the issued share capital of the Company arising from the Share Consolidation will be aggregated and, if possible, sold, with the benefits accruing to the Company, and (b) the par value of each issued consolidated share will be reduced from HK$0.20 to HK$0.01 by cancelling HK$0.19 of the paid-up capital of each issued consolidated share, so that following such reduction, each issued consolidated share will become one adjusted share of HK$0.01 each; (ii) 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 for such purposes as permitted by all applicable laws and the memorandum and articles of association of the Company and as the Board considers appropriate; and (iii) immediately following the effective date of the Capital Reduction, each authorized but unissued consolidated share will be subdivided into 20 authorized but unissued adjusted shares of HK$0.01 each. As at the date of this announcement, 960 million existing shares are issued and fully paid or credited as fully paid. Assuming that there is no further issue or repurchase of existing shares from the date of this announcement up to and including the effective date of the Capital Reorganization, the authorized share capital of the Company will be HK$20 million, divided into 2 billion adjusted shares of HK$0.01 each, of which 48 million adjusted shares will be issued and fully paid or credited as fully paid. The Board announces that, conditional upon the Capital Reorganization becoming effective, the board lot size for trading of the existing shares on the Stock Exchange will be changed from 10,000 existing shares to 5,000 adjusted shares. Upon the change in board lot size becoming effective, Shareholders may submit their existing share certificates for every board lot of 10,000 existing shares to the share registrar in exchange for new share certificates for every board lot of 5,000 adjusted shares, at the expense of the Company. The Board proposes that, conditional upon, among other things, the Capital Reorganization and the change in board lot size becoming effective, the authorized share capital of the Company be increased from HK$20 million (divided into 2 billion adjusted shares of HK$0.01 each) to HK$200 million (divided into 20 billion adjusted shares of HK$0.01 each) by the creation of an additional 18 billion unissued adjusted shares of HK$0.01 each. The Board proposes that, conditional upon, among other things, the Capital Reorganization and the increase in authorized share capital becoming effective, a Rights Issue be implemented on the basis of two (2) rights shares for every one (1) adjusted share held on the Record Date, at a subscription price of HK$0.34 per rights share (after the Capital Reorganization becoming effective), to raise gross proceeds of approximately HK$32.6 million (before expenses) by way of offering up to 96 million rights shares (after the Capital Reorganization becoming effective) to qualifying shareholders (assuming that there is no other change in the number of issued shares other than the Capital Reorganization on or before the Record Date). Assuming full subscription, the estimated net proceeds (after deducting the costs and expenses relating to the Rights Issue) will be approximately HK$31 million (assuming that the Company will not further issue new shares and will not repurchase shares on or before the Record Date). The Company intends to apply the net proceeds from the Rights Issue (i) approximately HK$26.7 million for payment of employee costs and directors' remuneration for the next 24 months; and (ii) approximately HK$4.3 million for payment of (a) professional fees (including listing expenses, auditor's remuneration and legal fees) and (b) other office-related expenses for the next 24 months. On 7 October 2026 (after trading hours), the Company entered into a placing agreement with the placing agent, pursuant to which the placing agent has conditionally agreed, on a best-efforts basis, to procure placees to subscribe for the unsubscribed rights shares and the unsold rights shares of the excluded shareholders.