Socialite Joyce Ma and her family have pledged more than $40 million to help rescue the troubled retailing empire she founded by participating in a proposed $78 million rights share sale. Joyce Boutique Holdings, which sells Emporio Armani, D & G and Prada designs in Hong Kong and the region, last night unveiled a one-for-one rights issue to reduce debts. The cash-call, along with last week's axing of 16 per cent of the company's 550 staff, is part of a re-engineering designed to revive its business which has been hit hard by the retail and tourism slump, and over-expansion in Hong Kong and the region. It will result in the issue of 312 million new shares to existing shareholders at 25 cents a share - a 35 per cent discount on the price of the shares before they were suspended on Tuesday. Controlling shareholder JW Mark - a trustee owned by Mrs Ma, who is chief executive, her husband and chairman Walter Ma King-wah, and daughter Yvette Ma - has promised to take up its portion of the rights shares. It owns 52.6 per cent of Joyce, and its subscription to the rights shares will cost $41 million. It also pledged to subscribe to at least another 40 million rights shares if the rest of the issue is undersubscribed. Franklin Resources, which manages mutual funds under the Franklin and Templeton names, holds 7.63 per cent of Joyce, while Joyce managing director Roberto Dominici owns 10,000 shares. It is unknown whether they also plan to take up their entitlements. In a statement last night, the company said: 'The directors believe the rights issue is in the best interests of the company and shareholders.' The company said it would spend $70 million of the $75 million net proceeds on reducing debts, and the remainder on boosting working capital. In the past month, Joyce shares have rebounded sharply after hitting a record low of 13 cents on January 19, when rumours - quickly denied by the company - that its principal bankers had reduced credit facilities to the company, spread through the market. Joyce said last week it was undergoing a consolidation, which included aligning purchases to declining market demand, negotiating rental reductions with landlords and re-organising the company's operations for the next 12 months. The company hopes the consolidation, which spans its retailing business across Hong Kong and the region, will produce a balanced budget by March 31 next year. In the six months to last September, the retailer saw a $27.9 million attributable loss, compared with a $10.17 million attributable profit in the same period of 1996.