Hong Kong-listed property developer Landing International Development Ltd is eyeing to implement a capital reorganization to pay off debts and to use as capital for any future investment opportunities.
In its latest regulatory filing, Landing International estimated the net proceeds to be approximately not less than HKD5.07 billion (US$653.7 million).
“The crediting of the amount of HK$1,850,929,133.13 arising from the Capital Reduction to the contributed surplus account of the Company will facilitate the payment of dividends as and when the Directors consider it appropriate in the future,” Landing International said. “The lower par value of the Shares will also allow the Company greater flexibility in setting the issue price for future equity fund raising exercises.”
The company clarified that the capital reorganization is conditional and upon the approval of the shareholders. It also assured investors that the capital reorganization “will not, of itself, alter the underlying assets, business operations, management or financial position of the Company and its subsidiaries except for the payment of related expenses.
“Accordingly, the capital reorganization is in the best interests of the Company and the Shareholders as a whole,” Landing International said.
Investors have been in for a roller coaster ride at the start of 2017. Earlier this month, Landing International announced that it has gained 100 percent control of Jeju Shinhwa World on Jeju Island in South Korea.
Landing International already holds 50 percent of the Jeju casino project. The company, however, said in December that it planned to take over the remaining 50 percent stake for a consideration equal to the $380.76 million, which was already contributed to the Jeju scheme by firms, plus a premium of $41.0 million.
The bought the stake from Genting Singapore Plc, which announced in November that it was selling its participation on the Jeju Island casino venture in order to focus on other projects, which includes a possible integrated resort license application in Japan.
Investors, however, were caught by surprise when Landing issued a profit warning that its annual net loss to widen in the 2016 reporting period. The Hong Kong-listed firm’s 2015 net loss was approximately HKD987.97 million.