Ryoden placement to fund mainland venture
By LOUISE LUCAS
PROPERTY developer Ryoden Development will raise up to $252.5 million through the placement of 100 million shares to fund a joint-venture project in Wuxi, Jiangsu province.
The group, which listed last September, has arranged to place the shares at $2.52 each, a discount of about 5.6 per cent to Wednesday's closing price.
Trading in the stock resumed yesterday afternoon. The share price closed down 7.5 cents at $2.60.
On Tuesday parent company Ryoden (Holdings) sold 75 million shares - 10 per cent of the issued capital - with an option to sell a further 25 million.
It also agreed to subscribe for an equivalent amount of new shares, at the same price.
Ryoden Development will inject about US$12 million into a 50-50 joint venture set up last month with an independent Hongkong investor and China partner to redevelop a 226,000 sq ft site in Wuxi.
The site is expected to offer a gross floor area of around 1.93 million sq ft, split into retail and office space.
Before the deal, Ryoden (Holdings) owned 55 per cent of the property developer. Its holding has now been cut to 48.53 per cent.
If the placing is completed, but not the subscription, the holding will fall to 41.67 per cent.
Ryoden (Holdings) has pledged to hold the new shares for a minimum of six months.
Designcase will see its 18 per cent interest in the issued shares - plus additional interest in the parent company's 55 per cent stake - rise to 64.41 per cent if both placing and subscription are completed.
The subscription remains subject to stock exchange approval.
Ryoden Development secretary Ariel Yeung said: ''The net proceeds of the subscription, after deduction of expenses, are expected to amount to approximately $251 million.
''It is intended that part of the net proceeds will be used to finance the joint-venture projects. The balance of the subscription proceeds will be used to finance the acquisition of new properties in Hongkong and China, especially Shanghai.''