China Sports International is proposing a renounceable and non-underwritten rights issue of up to 168,425,000 new shares at 10 cents each on the basis of one rights share for every four existing shares held by shareholders.

Assuming that the rights issue is fully subscribed, China Sports expects to raise $16.2 million in net proceeds from the rights issue (after deducting expenses of $0.6 million).

China Sports says the net proceeds from the rights issue will be used for future expansion and general working capital purposes.

The bulk of the proceeds will be injected as capital into the company’s wholly-owned subsidiary Yeli Sports (China) Co. for upgrading and expansion of distribution network, advertising and promotional expenses.

Stirling Coleman Capital has been appointed by China Sports as the manager for the rights issue.