GOME Retail Moves to Swap Over RMB336 Million Debt for Equity via Massive Share Issue

An update from GOME Retail Holdings ( (HK:0493) ) is now available.

GOME Retail Holdings has entered into two conditional subscription agreements to issue a total of 25.1 billion new shares at HK$0.015 per share under a specific mandate, primarily to settle existing indebtedness to two creditors. Under Subscription Agreement A, the company will allot 21.62 billion shares to Subscriber A (via a nominee) in exchange for the discharge of RMB290 million of debt, while under Subscription Agreement B it will issue 3.49 billion shares to Subscriber B to extinguish a further RMB46.8 million of liabilities. The company will seek shareholder approval at a special general meeting, with voting by poll and no shareholders currently required to abstain, and will apply for listing approval of the new shares from the Hong Kong Stock Exchange. The transactions, which remain subject to conditions precedent and may or may not proceed, form part of GOME’s efforts to reduce its debt burden through equity conversion, potentially easing liquidity pressures but also leading to significant share dilution for existing investors.

The most recent analyst rating on (HK:0493) stock is a Sell with a HK$0.01 price target. To see the full list of analyst forecasts on GOME Retail Holdings stock, see the HK:0493 Stock Forecast page.

More about GOME Retail Holdings

GOME Retail Holdings Limited is a Hong Kong-listed company incorporated in Bermuda, operating in the retail sector under the stock code 493. The group is engaged in consumer retailing, with its shares traded on the Main Board of the Hong Kong Stock Exchange, and its capital structure and financing arrangements are closely monitored by investors given its indebtedness and restructuring activities.

Average Trading Volume: 60,544,422

Technical Sentiment Signal: Sell

Current Market Cap: HK$699.1M

For detailed information about 0493 stock, go to TipRanks’ Stock Analysis page.