Hong Wei Asia (08191) has disclosed plans for a rights issue on the basis of one new share for every four existing shares held. The subscription price is set at HK$0.13 per rights share. Through the issuance of up to 295 million new shares, the company aims to raise up to HK$38.33 million before expenses, assuming no change in the number of issued shares by the record date.

Should the rights issue be fully subscribed and the number of issued shares remain unchanged, the net proceeds are estimated to be approximately HK$37.19 million. As of December 31, 2025, the group's bank balances and cash stood at about HK$830,000.

The company has entered into a deed of settlement to clear outstanding notes for a total consideration of HK$7.5 million, payable in installments. Upon full and timely payment, all liabilities under these notes will be discharged. Additionally, the group has outstanding loans due to two individuals, each amounting to HK$15 million. These circumstances have placed the group under significant financial pressure.

Management has been actively exploring viable fundraising options to enhance the group's capitalization and support its ongoing growth. The net proceeds from the rights issue, estimated at HK$37.19 million, are planned to be used as follows: (i) approximately HK$7.5 million and HK$21.77 million will be allocated to settle the outstanding notes and repay the loans, respectively; (ii) about HK$3.96 million will be used to develop existing business operations, including investments in fixed assets such as equipment and supporting infrastructure; and (iii) around HK$3.96 million will serve as general working capital for the company, covering professional fees and administrative expenses.