Understanding the Market | C ZENITH CHEM fell over 25% during trading, the company plans to undergo capital restructuring with a total market value of less than HKD 30 million

According to Zhitong Finance APP, C ZENITH CHEM (00362) fell over 25% during the trading session, and as of the time of writing, it has dropped 25%, trading at HKD 0.021, with a transaction volume of HKD 611,800. The company's total market capitalization is below HKD 30 million. In terms of news, on March 3, C ZENITH CHEM announced that the board of directors proposed a capital restructuring, involving a share consolidation where every 40 existing shares will be consolidated into 1 consolidated share; capital reduction, where the company's issued share capital will be reduced as follows: Cancellation of any fractional shares of the consolidated shares in the company's issued share capital, thereby rounding down the total number of consolidated shares in the company's issued share capital to the nearest whole number; and canceling the company's paid-up capital to reduce the par value of each issued consolidated share from HKD 4.0 to HKD 0.1, limited to HKD 3.9 per currently issued consolidated share; share split, where each statutory but unissued consolidated share will be split into 40 adjusted shares with a par value of HKD 0.1 each; reduction of share premium, where the total amount of share premium account will be reduced to zero; and all proceeds from the capital reduction and share premium reduction will be transferred to the company's paid-in surplus account (as defined in the Companies Act), and such funds will be used to offset the company's accumulated losses, or will be utilized by the board of directors in any other manner from time to time without further shareholder authorization, in accordance with the company's bylaws and all applicable laws of Bermuda. Once the capital restructuring takes effect, the board of directors proposes a rights issue at a subscription price of HKD 0.92 per rights share, where eligible shareholders on the record date will receive 2 rights shares for every 1 adjusted share held, issuing a total of 67,577,400 rights shares to raise a maximum of approximately HKD 62.2 million in total proceeds (before expenses) (assuming the company's share capital remains unchanged on or before the record date). The net proceeds from the rights issue (after deducting estimated expenses) are expected to be no more than approximately HKD 59.9 million