Fuxing China Group has proposed the placement of 3 million new ordinary shares at 41.5 cents per share to raise $1.245 million.
The placement shares represent about 17.44% of the existing issued and paid-up share capital of the company which comprises 17,205,438 shares.
Fuxing intends to use the net proceeds from the proposed placement towards the investment in technological research and development and upgrades to its intelligent manufacturing equipment and assembly line.
It says that it believes that the proposed placement is an overall efficient and beneficial method of raising funds to finance its research and development efforts in enhancing its production capabilities.
Fuxing also hopes to broaden the company’s shareholder base, and improve trading liquidity of the shares with an enlarged shareholder base.
The pro forma financial effects of the proposed placement are as follows. The share capital of the company after the proposed placement will increase to 20,205,438 shares.
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Net tangible asset per share will decrease from 31.78 RMB cents to 27.37 RMB cents, while earnings per share will become 0.03 RMB cents.
SAC Capital will be the placement agent for this exercise.
Shares in Fuxing China closed flat at 46.5 cents on Nov 5.
