Chong Fai Jewel (08537) announced that in order to adapt to the group's future expansion and growth, the board of directors proposed to increase the statutory share capital from HKD 15 million (divided into 150 million shares of HKD 0.1 per share) to HKD 750 million (divided into 7.5 billion shares of HKD 0.1 per share) by adding an additional 7.35 billion shares of unissued shares with a face value of HKD 0.1 per share (having the same rights in all respects as the existing shares). The increase in statutory share capital will take effect on the day of the extraordinary general meeting of shareholders, subject to the approval of an ordinary resolution by the shareholders.

After the increase in statutory share capital takes effect, the board of directors proposes to offer up to 225 million shares at a subscription price of HKD 0.12 per share, on a basis of 1 offer for every 3 shares held, to raise an estimated maximum of approximately HKD 27 million (before deducting expenses).

On June 25, 2024 (after trading hours), the company and the placing agent entered into a placing agreement. Pursuant to the placing agreement, the company conditionally appoints the placing agent, and the placing agent conditionally agrees to act as the placing agent of the company, to use its best endeavors to procure subscribers for the placing shares (i.e. the shares not taken up under the clawback and the placing shares not taken up by shareholders respectively) on the terms and subject to the conditions set out in the placing agreement. If all of the offer shares have been subscribed for under the provisional allotment letters and/or the additional application forms, the placing will not proceed.

If all the offer shares are subscribed, the net proceeds of the offer will be approximately HKD 26 million, intended to be used for expanding the retail store network, renovating the decoration of the existing 7 retail stores, repaying bank loans and interest maturing within the next year, and as general working capital of the group.