China Environmental Technology (00646) plans to implement a capital restructuring and share offering based on the “1 to 6” basis

Zhitong Finance App News, China Environmental Technology (00646) issued an announcement. The board of directors proposed a share capital restructuring, which will involve share consolidation, share capital reduction and share breakdown. The details are as follows: Immediately before the share capital reduction takes effect, the issued and unissued existing shares with a face value of HK$0.5 per 2 shares will be consolidated into 1 consolidated share with a face value of HK$1.00 per share;

The Company will reduce the company's issued share capital by cancelling the Company's fully paid up share capital by HK$0.99 per consolidated share issued at the time, thereby reducing the face value of each issued consolidated share from HK$1.00 to HK$0.01. The amount of approximately HK$169.6 million generated as a result of the reduction in share capital will be transferred to the Company's paid-up surplus account, and the directors will use the paid-up surplus account for purposes permitted by the Company Law and Rules; and as soon as the share capital reduction takes effect, each statutory but unissued consolidated share with a face value of HK$1.00 per share in the company's authorized share capital will be broken down into 100 statutory but unissued new shares with a face value of HK$0.01 per share. Following the entry into force of the share subdivision, the authorized share capital of the company will be increased to HK$500 million by adding a sufficient number of additional new shares, divided into 50 billion shares, with a face value of HK$0.01 per share.

As of the date of this announcement, the issued shares were traded on the Stock Exchange with 8,000 existing shares per trading unit. It is proposed that after the share capital restructuring comes into effect and subject to its regulations, each trading unit traded on the Stock Exchange will be changed from 8,000 existing shares to 10,000 new shares.

The Board recommended that when (including) the capital restructuring comes into effect, based on the issuance of 6 shares for each new share held by the eligible shareholders on the record date, at a subscription price of HK$0.185 per share, raise up to approximately HK$190.2 million (without deducting costs and expenses) (assuming that there is no change in the total number of issued shares) by issuing up to 1,028 million shares offered by issuing up to 1,028 million shares to be offered. The maximum net proceeds from the stock offering are expected to be approximately HK$184 million. The Company intends to use the net proceeds from the share offering as follows: (i) approximately HK$153 million (or approximately 82.87%) for partial redemption of convertible bonds due in 2021 and repayment of the Group's interest-bearing bank loans and other loans, other payables and accruals; (ii) approximately HK$31.58 million (or approximately 17.13%) for the Group's working capital, including but not limited to the Group's daily operating expenses for the next 12 months after completion of the share offering, including: approximately HK$17.29 million as the Company's general office operating capital for the next 12 months salary , directors' remuneration, legal and professional expenses, and other office expenses and administrative expenses; approximately HK$9.26 million as the operating capital of the Group's wastewater treatment division for the next 12 months, including rent, R&D costs, marketing expenses, upfront deposits and costs of receiving customer orders, employee salaries and administrative expenses; approximately HK$3.84 million as the working capital of the Group Energy Management Division for the next 12 months, including rent, employee salaries, upfront deposits, and costs of handling customer orders; and approximately HK$1.19 million as the operating capital of the Group's asset management business for the next 12 months , including employee salaries and administrative expenses.