Dunxin Financial Holdings Limited Announces Major Change to ADS Ratio Affecting Shareholders

Dunxin Financial Holdings Limited Announces Major Change to ADS Ratio

Dunxin Financial Holdings Limited, an entity based in Hong Kong, has made a significant announcement regarding the modification of its American Depositary Shares (ADS). This change comes in the context of improving the trading dynamics of its shares on OTC Pink, under the ticker DXFFY. On December 4, 2024, the company will modify its ADS ratio as follows: one (1) ADS will now represent 60,000 shares of Class A common stock, compared to the previous representation of 480 shares.

The impact of this proportion change is akin to a reverse stock split at a ratio of 1,125. For existing ADS holders, this means that their holdings will be adjusted to reflect this significant reduction in the number of ADSs, while the total equity ownership remains unchanged. Current ADS holders need to take note of this development as they will need to surrender their existing ADS for cancellation and exchange through their respective depositories. Detailed procedures related to this exchange will be provided to shareholders through official notifications from their depository banks.

Dunxin Financial has eagerly anticipated this change, citing expected proportional increases in the ADS trading price as a result of this adjustment. However, the company has cautioned its shareholders that there are no guarantees regarding the future pricing of the ADS post-adjustment. Market dynamics can be unpredictable and shareholders should remain aware of possible variations in value after the ADS ratio change.

Additionally, no fractional shares of the ADS will be generated as part of this change. Instead, minor claims for new ADSs that would arise from fractional holdings will be bundled and sold, with proceeds distributed to the corresponding ADS holders after deducting applicable fees and expenses. This ensures that existing shareholders are compensated fairly while avoiding complexities involved in fractional shares.

Dunxin Financial Holdings Limited is recognized for providing microfinance services to individuals and small to medium enterprises (SMEs) primarily in Hubei Province, China. Despite ceasing its lending operations since 2020, Dunxin remains committed to facilitating financial solutions for its clients through innovative revitalization strategies.

It’s noteworthy to mention that this announcement is accompanied by a safe harbor statement as defined under the Private Securities Litigation Reform Act of 1995. This means that the statements regarding future expectations, plans, and projections are inherently uncertain and involve various risks which could cause actual results to differ significantly from what the company anticipates.

As a result of this strategic realignment, Dunxin continues to focus on adjusting its financial services to best meet the demands of its target market while staying compliant with regulatory norms. Investors are advised to stay informed about future announcements and market updates which may influence their investment decisions and portfolio strategies.

In essence, the adjustment made to the ADS ratio signifies Dunxin Financial Holdings’ proactive approach towards enhancing liquidity and accessibility of its shares in a challenging market environment. Shareholders and potential investors should closely monitor the situation as the new trading parameters come into effect, potentially reshaping the company's market presence and performance moving forward.