Developer Sunac China Holdings Ltd, involved in a $6.5 billion deal with conglomerate Dalian Wanda Group, said on Tuesday it has agreed a private share sale worth $516.4 million, with the proceeds earmarked for “general working capital”.
The announcement sent Sunac shares down as much as 8.4 percent in early Hong Kong trade.
Sunac said it would issue 220 million shares to undisclosed investors, representing 5.33 percent of the enlarged issued share capital, showed a filing to the Hong Kong stock exchange. It will sell them for HK$18.33 each, an 8.81 percent discount to the stock’s Monday closing price.
The price was the low end of a marketing range of HK$18.33 to HK$19.10, according to a term sheet reviewed by Thomson Reuters publication IFR. The deal was a so-called top-up placement, with its main shareholder selling existing shares and then subscribing to the same number of new shares.
Last week, Sunac bought a 91 percent equity stake in 13 tourism projects from Wanda for 43.8 billion yuan ($6.49 billion) in a restructured deal.
Sunac Chairman Sun Hongbin, who said the firm had “ample” cash flow with 90 billion yuan cash on hand, previously said banks were reviewing Sunac’s credit risk after it initially announced China’s second-largest real estate deal in early July.
After the deal, Sun’s stake in Sunac will fall to 50.9 percent from 53.7 percent, the filing said.
The subscription is scheduled for completion by Aug. 7. Citigroup and Morgan Stanley are acting as placing agents.
Source: Reuters.com