CHINA WOOD INT (ASX: 01822) has announced a proposed rights issue, with the board recommending an offer on the basis of one new share for every one existing share held.

The subscription price is set at HK$0.077 per new share. This price represents a discount of approximately 43.80% compared to the closing price of HK$0.137 per share on the last trading day on the Stock Exchange.

Assuming no change in the total number of issued shares from the date of the announcement until the record date, the company will issue a maximum of 986,898,680 new shares. This issuance is expected to raise gross proceeds of up to about HK$77 million before expenses.

After deducting estimated expenses related to the rights issue, the net proceeds are estimated to be approximately HK$74 million.

Allocation Plan for Funds

The company intends to use the net proceeds within 12 months after the completion of the rights issue. Approximately 46.0% is earmarked for the research and development of the group's food and beverage products.

About 10.8% of the funds are allocated for marketing and promotional activities to support the expansion of the group's food and beverage business.

A further 8.1% is planned for marketing and promotional activities to support the group's timber-related business, covering costs such as marketing materials, trade shows, and exhibitions.

The remaining 35.1% is intended to be used as general working capital for the group. This includes, but is not limited to, operational costs, employee expenses, rental costs, professional fees, and other office expenditures.