GW TIANDI (01232) plans to implement a capital reduction, share subdivision, and change in board lot size, followed by a rights issue on a "3-for-1" basis.

GW TIANDI (01232) announced that the company proposes to implement a capital reduction, involving the cancellation of paid-up capital of US$0.09 per issued share to reduce the par value of each issued share from US$0.10 to US$0.01, such that after the reduction, each issued share of US$0.10 par value in the company's share capital will become one new issued share of US$0.01 par value. The credit arising from the capital reduction of approximately US$18.94 million will be used to offset the company's accumulated losses as at the effective date of the capital reduction, thereby reducing the company's accumulated losses, and any balance will be transferred to the company's distributable reserve account, which may be utilized by the directors as a distributable reserve. Immediately following the effective date of the capital reduction, each authorized but unissued share of US$0.10 par value will be subdivided into 10 authorized but unissued new shares of US$0.01 par value each. The board recommends that, after the capital reduction and subdivision become effective, the board lot size for trading on the Stock Exchange be changed from 8,000 existing shares to 10,000 new shares. Conditional upon the capital reduction, subdivision and change in board lot size becoming effective, the company proposes to raise gross proceeds of up to approximately HK$26.7 million (assuming the rights issue is fully subscribed) by issuing up to 70,140,500 rights shares at a subscription price of HK$0.38 per rights share (assuming the number of issued shares as at or before the record date remains unchanged except for the capital reduction and subdivision), on the basis of 1 rights share for every 3 new shares held by qualifying shareholders as at the close of business on the record date. If fully subscribed, the estimated maximum gross proceeds and net proceeds of the rights issue will be up to approximately HK$26.7 million and HK$24.9 million, respectively. The company intends to apply the net proceeds from the rights issue to repay relevant debts, settle expenses relating to debt restructuring, and for the group's general working capital.