Fuxing China Group Limited Announces Proposed Scrip Dividend Scheme

Key Points

• Proposed Scrip Dividend Scheme: The Board of Directors of Fuxing China Group Limited has announced the intention to introduce a scrip dividend scheme, named the “Fuxing Scrip Dividend Scheme”.
• Shareholder Flexibility: If implemented, shareholders may elect to receive dividends either in cash or as fully paid new shares, providing greater flexibility in managing their investment portfolios.
• Shareholder Approval Required: The scheme and the issuance of new shares under it will require approval from shareholders at the upcoming annual general meeting.
• SGX-ST Listing Approval: The company will also seek approval from the Singapore Exchange Securities Trading Limited (SGX-ST) for the listing and quotation of new shares issued under the scheme.
• Potential Market Impact: The scheme may increase share liquidity and expand the company’s share capital base, potentially affecting share value.

Detailed Overview

Fuxing China Group Limited, incorporated in Bermuda, is moving to adopt a scrip dividend scheme. Under this scheme, the Board may choose to apply the option to any declared cash dividend—including interim, final, special, or other dividends. Shareholders listed in the Register of Members or the Depository Register (as defined by Singapore’s Securities and Futures Act 2001) will have the opportunity to elect to receive their dividend in the form of new fully paid shares in lieu of cash. This option can be selected for all or part of the dividend amount.

The Scrip Dividend Scheme aims to provide shareholders with flexibility in their investment strategies. By allowing reinvestment of dividends in company shares, shareholders can increase their equity participation without incurring brokerage fees, stamp duty, or other transaction costs. This is also expected to enhance share liquidity in the market, as new shares are issued to those who opt for the scrip dividend.

For the company, the scheme offers several advantages: cash that would otherwise be paid out as dividends can be retained and used for growth and expansion initiatives. The issuance of new shares will enlarge the company’s share capital base, bolster working capital, and improve financial flexibility. These actions are aligned with the company’s ongoing efforts to enhance shareholder value.

Critical Shareholder Information

• Shareholders’ Approval: Although the Listing Manual does not require shareholder approval for scrip dividend schemes, the company’s Bye-laws mandate approval at a general meeting for both the adoption of the scheme and the issuance of new shares under it. The company intends to seek these approvals at the upcoming annual general meeting.
• SGX-ST Approval: The company will apply for SGX-ST’s approval for the listing and quotation of new shares, as required. Approval-in-principle from SGX-ST should not be construed as endorsement of the scheme or the company’s merits.
• Restrictions for Overseas Shareholders: Shareholders with addresses outside Singapore should pay special attention to restrictions outlined in the scheme’s statement. These restrictions may impact their eligibility to participate.
• Disclosure and Responsibility: The Board confirms that all material facts regarding the scheme, the company, and its subsidiaries have been fully and truthfully disclosed. Shareholders and investors are encouraged to consult professional advisors if uncertain about their actions.
• Price Sensitivity: The implementation of the scrip dividend scheme could affect share liquidity, capital base, and financial flexibility, all of which are factors that may influence share price and investor sentiment.

Enquiries

Shareholders with questions regarding the Scrip Dividend Scheme may contact:
Boardroom Corporate & Advisory Services Pte. Ltd.
1 Harbourfront Avenue, Keppel Bay Tower, #14-07, Singapore 098632

Potential Share Price Impact

This announcement is significant and potentially price-sensitive. The adoption of the Scrip Dividend Scheme could:

• Increase share liquidity as more shares become available in the market.
• Enlarge the share capital base, influencing valuation and market capitalisation.
• Strengthen the company’s financial position by retaining cash that would otherwise be paid as dividends.
• Alter investor perceptions, as the scheme gives shareholders more flexibility and potentially attracts new investors who favour reinvestment options.

Shareholders and investors should monitor further announcements regarding the specific application of the scheme to upcoming dividends and the results of the annual general meeting.

Disclaimer

This article is for informational purposes only and does not constitute investment advice, solicitation, or recommendation. Investors should consult their own professional advisors before making any investment decisions based on the information provided. The company has not announced any specific dividend application or quantifiable impact at this time; approval and implementation are pending shareholder and regulatory consent.

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