Hong Kong-listed Shin Hwa World Ltd has revealed details of a new subscription agreement that will see it raise HK$28.5 million (US$3.6 million) to be used primarily for maintenance purposes at its Korean integrated resort Jeju Shinhwa World – home to Landing Casino.
According to information published overnight, the full total of 845,250,000 subscription shares will be issued to a company called Resplendence Investment Development Limited, whose sole owner and guarantor, Zhang Tingting, is described as an individual investor and real estate property owner of the group’s residential development at Jeju Shinhwa World.
The new shares will represent 20% of Shin Hwa World’s current issued share capital and see Resplendence hold a 16.67% stake upon completion. This will also reduce the ownership of the company’s founder and largest individual shareholder, Yang Zhihui, from 35.06% to 29.21% and public holdings from 38.14% to 31.78%.
Shin Hwa World said it intends to use HK$14 million (US$1.8 million) of the net proceeds from the subscription for upgrade, repair and maintenance of the existing building, equipment and facilities within Jeju Shinhwa World, HK$10 million (US$1.3 million) for payment of interest expense and HK$4.5 million (US$575,000) for sales and marketing promotion and advertising expenses.
It added that issuing new shares was seen by the company’s directors as a “more desirable financing option as compared with debt financing as it does not create any interest payment obligations which will have a negative impact on the gearing ratio of the Group.”
Shin Hwa World last week issued a profit warning on exected losses of between HK$450 million and HK$540 million (US$57.5 million and US$69.0 million) for the year ended 31 December 2023.
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