Debt-restructure plan boosts Imagi shares
Shares in loss-making Imagi International surged as much as 50 per cent to 15 HK cents yesterday on news of a debt restructuring plan that will introduce venture capitalist Francis Leung Pak-to and investor Mico Chung Cho-yee as controlling shareholders.
The stock price of the company closed at 13.5 HK cents yesterday, up 33.7 per cent. Trading in the shares was suspended from Thursday last week until Wednesday this week.
The digital film maker, whose production, Astro Boy, fared poorly at the box office last year, said it had secured financial support from a consortium led by Leung and Chung, which would subscribe for 1.88 billion new Imagi shares at 7 HK cents per share, a 48 per cent discount to yesterday's close.
The subscription will raise around HK$131.6 million in total. The consortium, 60 per cent controlled by Leung, with Chung owning the rest, will become Imagi's controlling shareholder after the transaction. The two will also offer a bridging loan of HK$20 million.
Leung believed the animation production company would be able to benefit from the mainland's booming market.
According to a statement filed to the Hong Kong Stock Exchange yesterday, Imagi International propose to consolidate every ten shares into one and issue no fewer than 1.44 billion rights shares at 7 HK cents each to raise HK$199.8 million, on the basis of four rights shares for every one adjusted share. The gross proceeds will be partly used to repay the indebtedness of around HK$241 million owed to the core creditors.
Poon Chiong-kit, chief executive officer, said the move would 'provide Imagi with sufficient capital to move forward with our core operations'.
Originally a Christmas tree manufacturer, the company turned into a digital producer of animated films in 2000. Its first release TMNT (Teenage Mutant Ninja Turtles) earned a solid US$95.6 million worldwide, but its second film Astro Boy only made US$23 million and left the company heavily in debt.
Imagi International took a series of measures including withdrawing the financial support for Imagi Production, its in-house animation production arm, last month after it recorded a net loss of HK$726 million for the six months to last September.
