Fuxing China Group will not proceed with its secondary listing application on the Nasdaq, the Mainboard-listed company announced on Nov 24.
According to the group, the proposed transaction was aborted as it experienced a prolonged delay in obtaining the requisite approval from the China Securities Regulatory Commission (CSRC) for the American Depositary Shares (ADS) offering. There is also no certainty of the approval being granted, the group adds.
The transaction was also cancelled following Nasdaq’s recent proposed amendments to its listing rules, which include stricter and additional requirements for companies with businesses mainly administered in China.
The group also cited the additional financial and administrative resources in complying with the relevant US securities laws as one of the reasons behind the cancellation
As at its announcement on Nov 24, the underlying shares have been transferred back to the group and held as treasury shares, have been cancelled.
All costs and expenses incurred in connection with the proposed transaction have been borne by the group’s executive chairman, Hong Qing Liang, and would have been repayable upon the successful completion of the secondary listing. With the group’s decision to cancel the proposed transaction, repayment to Hong will be waived in full.
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Fuxing China Group first announced that it was looking to explore a secondary listing on Nasdaq on Dec 31, 2021. At the time, the group said the potential listing and placement of new shares in conjunction with the listing will be “beneficial and advantageous” to the group.
A secondary listing would have also provided the group with additional capital for future growth and expansion plans as well as an alternative market to raise capital and to gain access to more institutional and retail investors. The group also envisioned the proposed transaction to raise and enhance its profile internationally, increase its long-term visibility and enhance its reputation among its investors, suppliers and customers.
Shares in Fuxing China Group last traded at 47 cents before its trading halt on the morning of Nov 21.
