Magazine article Screen International

SMI Shares Plunge on Acquisition News

Magazine article Screen International

SMI Shares Plunge on Acquisition News

Article excerpt

Shares of Hong Kong-listed SMI Culture Group plunged more than 50% during trading yesterday, after the company announced a share consolidation and rights issue to fund the acquisition of Beijing-based production company Grand Astute.

SMI Culture's shares closed at HK$0.51 on Monday, August 11, which marked the company's first day of trading since June 11. The company's shares were suspended from trading for two months after it announced a "possible acquisition and fundraising exercise".

The company plans to raise HK$788m by consolidating every two shares into one and issuing new shares at HK$0.35. It would then use around half the proceeds, or HK$360m, to acquire a 35% stake in Grand Astute, which is owned by SMI Culture's major shareholder Qin Hui. Remaining proceeds would be used to invest in film and TV production and to repay debt. …

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