Shin Hwa World Shareholders Approve HK$182M Rights Issue to Bolster Finances

Shin Hwa World Ltd, the operator behind Jeju Shinhwa World resort in South Korea, has won shareholder approval for its proposed rights issue at the Special General Meeting held on 16 September 2025. The plan involves offering one rights share for every one existing share held by qualifying shareholders, at a subscription price of HK$0.10 per rights share, to raise gross proceeds of roughly HK$182.57 million.

The rights issue has multiple key uses, chiefly to strengthen the financial structure of the company and help repayment of short-term debts. For example, about HK$100 million is earmarked for repaying a HK$50 million loan due in November 2025 and a HK$50 million bond maturing in April 2026. Other funds will support operations, facility maintenance and marketing efforts, plus general working capital to help the company cope with headwinds including falling revenue and rising costs. 

Financial advisers engaged by Shin Hwa World believe the rights issue is “on normal commercial terms, fair and reasonable, and in the interests of the company and the shareholders as a whole.” Notably, the rights issue is expected to improve the company’s gearing ratio (a measure of leverage) which as of end-2024 was about 19.6%, by using proceeds to reduce debt.  However, shareholders also face dilution risks: assuming full acceptance, the issue would increase total issued share capital by about 50%, and those who do not take up their rights may suffer — though they have the option to sell their “nil-paid” rights in the market.