On October 18, Gaodi Holdings (01676.HK) announced that the company plans to raise up to HK$30.8 million (excluding expenses) by offering shares to shareholders. The offering will not be underwritten, involving the issuance of up to 77.005 million shares at a price of HK$0.40 per share. Shareholders will be entitled to one (1) share for every two (2) shares held on the record date.
The company intends to use the net proceeds from the share offering as follows: (i) approximately 40% of the net proceeds will be used for product purchases/deposits, marketing and advertising expenses, and the corporate development of the group's existing food business; (ii) approximately 40% of the net proceeds will be used for product purchases/deposits, marketing and advertising expenses, and the corporate development of the group's existing dining business; and (iii) approximately 20% of the net proceeds will be used for the group's general operating funds.
In addition to the share offering, the directors have considered other debt or equity financing options, such as bank loans, private placements, or public offerings. The directors note that bank loans (if available) will incur additional interest costs and put pressure on the company's working capital, whereas a private placement of new shares would dilute existing shareholders' equity without offering them the opportunity to participate. Compared to a public offering, a share offering allows shareholders to sell their rights to unpaid shares in the market. The share offering gives eligible shareholders the opportunity to maintain their respective shareholding proportions and continue to participate in the group's future development. After considering the above options, the directors believe that the share offering is in the best interests of the company and shareholders overall, enhancing the company's capital base as an appropriate fundraising method to support continued growth and business expansion while allowing eligible shareholders to maintain their ownership stake in the company.
