Ad agency Qin Jia Yuan plans to raise $128m

Trading in shares of advertising agency Qin Jia Yuan Media Services was suspended yesterday pending an announcement relating to a share placement. The company planned to raise $128.1 million to set up a mainland advertising agency joint venture, sources said.

The sources said Qin Jia Yuan would place a topped-up batch of 70 million shares at $1.83 each, an 8.5 per cent discount to the share's $2 closing price on Thursday. Luen Fat Securities is the lead placing agent.

'Qin Jia Yuan originally planned to offer only 60 million shares, but investor response was so strong that the company decided to top up the offer,' a source said.

Around $38 million of the proceeds would be invested in a joint venture with Tianjin Qin Jia Yuan, which sells prime-time television advertising slots in five mainland provinces.

The remainder would be used to produce a drama series and as general working capital, the sources added. Qin Jia Yuan declined to comment yesterday.

Qin Jia Yuan chief executive Anita Leung Fung-yee last month said that the joint venture, which would be formalised later this year, was expected to generate revenue of more than $80 million. The joint venture will first do business with television stations in Hubei, Hebei, Jiangsu, Heilongjiang and Guizhou provinces.