Momentum Financial proposes debt restructuring, seeks whitewash waiver

Momentum Financial Holdings Limited dispatched a circular to shareholders on October 20, 2025, detailing a proposed debt restructuring. The plan involves capitalizing outstanding debts of HK$178,615,220 through the issuance of 3% unsecured convertible bonds, with a conversion price of HK$0.073 per share. This restructuring aims to settle existing promissory notes and corporate bonds owed to various creditors, including Rosy Benefit and Forever Brilliance, without immediate cash outflow, thereby preserving the Group's limited cash reserves of approximately HK$9.5 million as of June 30, 2025.

The proposed transactions require shareholder approval at a Special General Meeting (SGM) on November 10, 2025. Key resolutions include approving the settlement agreements and the specific mandate for issuing conversion shares, which would represent approximately 249.16% of the existing share capital. Furthermore, a whitewash waiver is sought to exempt the Creditors Concert Group from making a mandatory general offer, as their voting rights could increase to approximately 71.36% upon full conversion. The repayment of an indebtedness to Mr. Zheng, a shareholder, is also classified as a special deal requiring executive and independent shareholder consent.

The Independent Board Committee, advised by RaffAello Capital Limited and Red Sun Capital Limited, recommends shareholders vote in favor of these resolutions, deeming the terms fair and reasonable given the Company's financial position and the need to address imminent funding requirements. The Debt Restructuring is expected to improve the Company's liquidity, net asset value, and gearing ratio.