NaaS Technology Inc. Announces Plan to Implement ADS Ratio Change
NaaS Technology announced a planned change in the ratio of its American Depositary Shares (ADS) to Class A ordinary shares. The ratio will shift from 1 ADS per 10 Class A shares to 1 ADS per 200 Class A shares, effectively a one-for-twenty reverse split. This change will be effective around June 10, 2024. Existing ADS holders must exchange every 20 ADSs for one new ADS. No fractional ADSs will be issued; instead, fractional entitlements will be aggregated and sold. The underlying Class A shares remain unaffected. The ADS trading price is expected to increase proportionally, but there's no guarantee it will be 20 times the previous price.
- Planned ADS ratio change is expected to increase the ADS trading price proportionally.
- The change aims to align with current market standards.
- No impact on underlying Class A ordinary shares.
- Fractional ADS entitlements will be sold, and proceeds will be distributed to ADS holders.
- Exchange of ADSs incurs potential fees, taxes, and expenses for ADS holders.
- The company provides no assurance that the ADS trading price will be 20 times the pre-change price.
- Administrative burden for ADS holders who must surrender and exchange ADSs.
Insights
The change in the ADS Ratio from one ADS representing 10 Class A ordinary shares to one ADS representing 200 Class A ordinary shares is effectively a one-for-twenty reverse ADS split. This move is typically aimed at increasing the nominal trading price of the ADS, potentially making it more attractive to institutional investors who might have restrictions on investing in lower-priced stocks.
For retail investors, this change may seem neutral at first glance, as the underlying value of their holdings remains the same. However, it's important to recognize that reverse splits can sometimes be perceived negatively by the market, as they are occasionally implemented by struggling companies to avoid delisting. That said, NaaS Technology Inc. is not in such a situation; this adjustment seems more strategic, possibly to align with market standards and attract a broader range of investors.
Investors should be aware of the potential increase in ADS trading price and adjust their investment strategies accordingly. It's also worth noting that while the reverse split may boost the stock's price, it does not inherently change the company's fundamentals.
This adjustment is an attempt to enhance the appeal of NaaS Technology Inc.'s ADSs on the Nasdaq market. By increasing the trading price of each ADS, the company might aim to gain more visibility and respectability within the U.S. market. This could be particularly important for an EV charging service company from China, as it seeks to attract more significant institutional investors who tend to shy away from low-priced stocks due to trading and perception issues.
However, it's essential to monitor the market's reaction after the effective date. Historical data show mixed reactions to reverse splits, depending on the company's overall financial health and future growth potential. Investors might want to keep an eye on trading volumes and the general performance of the EV sector, given the industry's rapid evolution and competitive landscape.
For the Company's ADS holders, the change in the ADS Ratio will have the same effect as a one-for-twenty reverse ADS split. A post-effective amendment to the ADS Registration Statement on Form F-6 will be filed with the SEC to reflect the change in the ADS Ratio. The Company anticipates that the change in the ADS Ratio will be effective on or about June 10, 2024 (
Each ADS holder of record at the close of business on the date when the change in ADS Ratio is effective will be required to surrender and exchange every 20 existing ADSs then held for one new ADS. JPMorgan Chase Bank, N.A., as the depositary bank for the Company's ADS program, will arrange for the exchange of the current ADSs for the new ones. The Company's ADSs will continue to be traded on the Nasdaq Stock Market under the symbol "NaaS."
No fractional new ADSs will be issued in connection with the change in the ADS Ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the depositary bank. The change in the ADS Ratio will have no impact on the Company's underlying Class A ordinary shares, and no Class A ordinary shares will be issued or cancelled in connection with the change in the ADS Ratio.
As a result of the change in the ADS Ratio, the ADS trading price is expected to increase proportionally, although the Company can give no assurance that the ADS trading price after the change in the ADS Ratio will be equal to or greater than 20 times the ADS trading price before the change.
The depositary and the Company have also agreed to amend and restate the deposit agreement, dated as of October 19, 2017 and amended on May 31, 2022, in order to bring it in line with current standards and to reflect the change in the ADS Ratio.
About NaaS Technology Inc.
NaaS Technology Inc. is the first U.S. listed EV charging service company in China. The Company is a subsidiary of Newlinks Technology Limited, a leading energy digitalization group in
For investor and media inquiries, please contact:
Investor Relations
NaaS Technology Inc.
E-mail: ir@enaas.com
Media inquiries:
E-mail: pr@enaas.com
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SOURCE NaaS Technology Inc.
FAQ
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