Rights issue hits Citic Resources shares
Shares in Citic Resources Holdings fell as much as 10.4 per cent intraday yesterday after it proposed a HK$2.52 billion rights issue.
The oil and metals production and trading arm of state-backed mainland conglomerate Citic Group fell to HK$3.97 before narrowing the loss to end at HK$4.25, a 4.06 per cent decline from Friday's close.
'A rights issue would be in the best interest of the company considering that we raised funds via two share placements last year,' chief executive Sun Xinguo said yesterday.
Mr Sun said the proceeds would be used to lower the company's debt, fund investments and aid expansion.
Citic Resources plans to raise crude output 13 per cent its Kazakhstan field to 40,000 barrels a day this year from 35,500 barrels a day last year, he said.
The firm also plans to increase the production of manganese this year after acquiring a mine in Gabon, Africa for 120 million yuan (HK$135.12 million) late last year as the price of the mineral soared.
