Pacific Legend Rights Issue Undersubscribed by 60.91%

Pacific Legend, a company listed on the Growth Enterprise Market (GEM) of the Hong Kong Stock Exchange, recently announced the results of its rights issue. As of April 24, 2025, the company received only two valid applications for the 53,493,500 shares offered, representing approximately 39.09% of the total shares available for subscription. This resulted in an undersubscription of 83,354,500 shares, or about 60.91% of the total shares offered.

The company has implemented a compensation arrangement for the 83,354,500 unallocated shares, which represents approximately 60.91% of the total shares offered in the rights issue. According to the GEM listing rules, the company will sell these unallocated shares through an independent placement agent. The beneficiaries of this sale will be the shareholders who participated in the rights issue.

The placement agent is expected to commence the placement process on April 28, 2025, and it will conclude by May 2, 2025. Pacific Legend has stated that it will not issue any shares that are not part of the compensation arrangement, which means the size of the rights issue will be reduced accordingly.

The undersubscription of the rights issue indicates a lack of investor interest, which could be due to various factors such as market conditions, investor sentiment, or concerns about the company's future prospects. Despite the undersubscription, Pacific Legend remains committed to its strategic initiatives and continues to explore other avenues for raising capital.

The company had initially planned to use the proceeds from the rights issue to support its ongoing operations and expansion plans. However, with the reduced amount of funds raised, Pacific Legend may need to reassess its financial strategy and consider alternative funding options. The company has not yet provided an official statement on how it plans to address the shortfall in funds, but it is expected to release further updates in the coming weeks.

The undersubscription of the rights issue highlights the challenges faced by companies in raising capital through traditional means. It also underscores the importance of investor confidence and market conditions in determining the success of such initiatives. Pacific Legend's experience serves as a reminder for other companies to carefully consider their funding strategies and to be prepared for potential setbacks in the capital markets.