mDR Limited Receives Whitewash Waiver for Rights cum Warrants Issue – Key Investor Details

Introduction

mDR Limited has announced the receipt of a Whitewash Waiver from the Securities Industry Council (SIC) in relation to its proposed renounceable non-underwritten Rights cum Warrants Issue. This development follows earlier company announcements from June, July, and October 2025, and is a significant step forward for the fundraising plan. The waiver was granted to the LZ Group, comprising the Undertaking Shareholder and Ms. Zhang Yanmin, allowing them to subscribe for a substantial number of rights shares and warrants without triggering a mandatory general offer.

Key Points for Investors

• Whitewash Waiver Details: The SIC has granted a waiver for the LZ Group from making a Mandatory Offer for the company, provided certain conditions are satisfied. These include shareholder approval for a Whitewash Resolution, abstention by the LZ Group and their concert parties from voting, and clear disclosures in the shareholder circular.
• Significant Subscription: The Undertaking Shareholder intends to subscribe for his pro-rata entitlements and apply for up to 500,000,000 excess Rights Shares with Warrants. This could result in a substantial increase in their shareholding and voting power, potentially exceeding 49% of the company’s total voting rights.
• Potential Shareholding Impact: If the full allotment and exercise of warrants occur, the LZ Group and their concert parties may hold more than 49% of the company’s voting rights. This would give them significant control and could have implications for minority shareholders, including possible dilution and changes in governance dynamics.
• Shareholder Approval Required: A general meeting will be convened for shareholders to vote, via poll, on the Whitewash Resolution. Approval must be obtained within three months of the SIC’s letter, and completion of the Rights cum Warrants Issue must occur within three months of approval. The exercise of warrants may be completed within five years from issuance.
• Independent Financial Adviser: An independent financial adviser will be appointed to advise independent shareholders on the Whitewash Resolution, ensuring that all parties are fully informed before voting.
• Disclosure Commitments: The circular to shareholders will include detailed information about the rights issue, dilution effects, current and post-transaction shareholding positions of the LZ Group, and the implications of the Whitewash Resolution. It will also make prominent reference to the fact that shareholders are waiving their rights to a general offer at the highest price paid by LZ Group in the past six months, and may forgo the opportunity to receive a general offer from another party.
• Compliance with Listing Rules: The excess applications by the Undertaking Shareholder are subject to Rule 723 of the Listing Manual, ensuring at least 10% of issued shares are held by the public at all times.
• Potential Price Sensitivity: The Rights cum Warrants Issue, and the resulting waiver of mandatory offer obligations, could significantly affect the share price. Increased control by the LZ Group and dilution to minority shareholders may be viewed either positively or negatively by the market, depending on investor sentiment regarding the company’s prospects and governance.
• Cautionary Statement: Completion of the Rights cum Warrants Issue is subject to various conditions and approvals. There is no certainty that the issue will be completed, or that terms will remain unchanged. Shareholders and potential investors are urged to exercise caution and consult professional advisers.
• Next Steps: The company will dispatch a circular with further details and notice of the extraordinary general meeting (EGM) in due course. Further announcements will be made as developments occur.

Important Considerations for Shareholders

• Voting Implications: Shareholders who vote for the Whitewash Resolution will waive their rights to a general offer from the LZ Group, potentially at a premium price.
• Dilution Risk: The issue and subsequent exercise of rights and warrants will dilute existing shareholders’ interests, particularly if the LZ Group’s holding exceeds 49%.
• Control Changes: The LZ Group will be free to acquire further shares without triggering a mandatory offer, potentially consolidating their control over the company.
• Market Reaction: The market may react strongly to these developments, which could impact the share price. Investors should monitor announcements closely and assess their positions in light of these changes.

Conclusion

The granting of the Whitewash Waiver and the proposed Rights cum Warrants Issue mark significant developments for mDR Limited. These changes could alter the company’s ownership structure, governance, and market value. Shareholders should pay close attention to the upcoming EGM and the detailed circular, as the decisions made will have lasting effects on their investments. As always, exercise caution, stay informed, and consult professional advisers where necessary.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with qualified financial advisers before making any investment decisions. The completion of the Rights cum Warrants Issue is subject to conditions and approvals which may or may not be fulfilled. The author and publication accept no liability for any actions taken based on this article.

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