Shin Hwa World plans to raise $39.6 million through a rights issue.

A thorough capital reorganization is planned by Hong Kong-listed casino developer Shin Hwa World Ltd. as part of a deliberate effort to improve its financial standing.

The company outlined its goals in a recent Hong Kong Stock Exchange filing. It is most recognized for being the driving force behind Jeju Shinhwa World, a prominent casino complex in Jeju, South Korea, that is only open to foreigners.

A targeted fundraising effort is one of the crucial measures that are emphasized. Shin Hwa World intends to raise HK$263.7 million ($39.6 million) through a rights issue.

The company has disclosed plans to combine its shares, converting each ten HKD0.01 shares that now exist into a single HKD0.10 share.

Shin Hwa World will also implement a capital reduction plan as part of the capital reorganization. In order to accomplish this, the issued share capital of each shareholder must be rounded down to the nearest whole number, thus canceling any fractional shares. Credits for excess will be moved to the business’s “surplus account.”

At the time of the announcement, Shin Hwa World Ltd. estimated that the capital decrease would leave an excess of about HK$45.6 million ($5.8 million), with approximately 5.07 billion existing shares in circulation.

But the revelation of the capital reorganization set off a powerful market reaction, causing Shin Hwa’s stock to plunge more than 18%.

It is crucial to take into account the circumstances surrounding Shin Hwa World, especially the prior investigation that Yang Zhihui, the company’s principal shareholder, underwent.

Yang resigned as director of Shin Hwa in June 2023 as a result of a prior investigation into potential market manipulation by the China Securities Regulatory Commission in December 2020.

Original Story by: Asian Gaming Brief