read page 12 of the prospectus. below is a link to the...

read page 12 of the prospectus.

below is a link to the prospectus

https://hotcopper.com.au/threads/an...pectus.2601021/?post_id=16047867#.WYF-yYSGNEY

==
Most banks in the PRC require a guarantee company to have
a Magnification which is less than 5 to 6 times its net assets.
The Company’s Magnification at 31 December 2014 was
4.84, and is therefore nearing its limit. The impact of this
has seen the Company temporarily suspend operations at
its Qianxinan branch. One of the key purposes of the Offer
is for the Company to receive an injection of capital through
the funds raised under the Offer, which will in turn lower
the Company’s Magnification and enable it to provide more
financing guarantee services.
==