Benzinga | Jan 13, 2022 04:33PM EST

CORRECTION: Weidai Announces ADS Ratio Change That Will Have Same Effect As 1-For-3 Reverse Stock Split

Weidai Ltd. (the "Company" or "Weidai") (NYSE:WEI), a leading auto-backed financing solution provider in China, today announced that it will change the ratio of its American depositary shares ("ADSs") representing its Class A ordinary shares from one (1) ADS representing one (1) Class A ordinary share to one (1) ADS representing three (3) Class A ordinary shares.

For Weidai's ADS holders, the change in the ADS ratio will have the same effect as a one-for-three reverse ADS split. There will be no change to the Company's Class A ordinary shares. The effect of the ratio change on the ADS trading price on the New York Stock Exchange (the "NYSE") is expected to take place at the open of trading on January 26, 2022 (U.S. Eastern Time). ADS holders of record on the effective date will not be required to take any action in connection with the ADS ratio change. The exchange of every three (3) then-held ADSs for one (1) new ADS will occur automatically with the then-held ADSs being cancelled and new ADSs being issued by the depositary bank, in each case as of the effective date for the ADS ratio change. Weidai's ADSs will continue to be traded on the NYSE under the symbol "WEI".

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.

As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, although the Company can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than three times the ADS price before the change.