Milan Station (01150) has announced that, as of the date of this announcement, the company's authorised share capital stands at HK$80 million, divided into 2 billion existing shares.

In order to give the company greater flexibility in fundraising, to address the group's future business expansion and growth, and to provide more flexibility for future enlargement of the company's share capital, the board has proposed increasing the company's authorised share capital to HK$400 million, divided into 10 billion existing shares.

The proposed increase in authorised share capital is subject to approval by shareholders via an ordinary resolution at an extraordinary general meeting.

Conditional upon the increase in authorised share capital becoming effective, the board has proposed implementing a share consolidation on the basis of consolidating every 5 issued and unissued shares of HK$0.04 each into 1 consolidated share of HK$0.20 each.

The share consolidation is subject to, among other things, approval by shareholders at an extraordinary general meeting.

Upon the increase in authorised share capital becoming effective, the company's authorised share capital will be HK$400 million, divided into 10 billion existing shares of HK$0.04 each, with 1.057 billion existing shares issued and fully paid or credited as fully paid.

Assuming no additional existing shares are issued or repurchased between the date of this announcement and the effective date of the share consolidation, upon the increase in authorised share capital and the share consolidation becoming effective, the company's authorised share capital will be HK$400 million, divided into 2 billion consolidated shares of HK$0.20 each, of which 211 million consolidated shares will be issued.

As of the date of this announcement, existing shares are traded on the Stock Exchange in board lots of 10,000 existing shares.

It is proposed that, conditional upon the share consolidation becoming effective, the board lot size for trading on the Stock Exchange will be changed from 10,000 existing shares to 5,000 consolidated shares.

Conditional upon the increase in authorised share capital and the share consolidation becoming effective, the company proposes to conduct a rights issue on the basis of one rights share for every one consolidated share held on the record date, at a subscription price of HK$0.36 per rights share, to raise gross proceeds of up to approximately HK$76.1 million, before deducting expenses, through the issuance of up to 211 million rights shares.

The rights issue is only open to qualifying shareholders and will not be offered to excluded shareholders, if any.

The maximum estimated net proceeds from the rights issue, after deducting all relevant expenses, is approximately HK$73.1 million, assuming the rights issue is fully subscribed and there is no change in the number of issued consolidated shares on or before the record date.

The net price per rights share, after deducting expenses related to the rights issue, is approximately HK$0.346, assuming the rights issue is fully subscribed and there is no change in the number of issued shares on or before the record date.

Assuming the rights issue is fully subscribed and there is no change in the number of issued shares on or before the record date, the company intends to apply the net proceeds from the rights issue as follows: (i) approximately 54.8% for inventory procurement; (ii) approximately 7.1% for settling the group's retail store rental expenses for the next 12 months; (iii) approximately 8.5% for paying the group's employee salaries for the next 12 months; (iv) approximately 24.9% for repaying bonds payable; and (v) approximately 4.7% for the group's general working capital.