PetroAsian Energy plans new share sale to raise HK$218.4m
PetroAsian Energy Holdings is set to cash in on its red-hot stock price with a HK$218.4 million share sale, kicking off its third round of fund-raising over the past nine months.
The conglomerate, which has interests ranging from paint production to oil exploration, plans to sell 220 million shares at HK$1.02 apiece, a 6.4 per cent discount to its previous closing price. It has surged 98.2 per cent so far this year, defying a 7.3 per cent drop in the benchmark Hang Seng Index.
PetroAsian Energy slid 3.7 per cent during the morning session yesterday before clawing back losses to finish unchanged on the day at HK$1.09.
The placement will enlarge its existing share capital by about 6.8 per cent, the company announced to the stock exchange.
'It has the incentive to push up the share price and place it at a higher level [so] then it can raise more money,' said Linus Yip, a strategist at First Shanghai Securities. 'Some companies may try to raise more funds in the market but [it] really hinges on market sentiment.'
PetroAsian Energy previously came to market for two share sales and a warrant placement since last May. Proceeds from the current plan have been earmarked for payment owed on an oil and gas project in Tunisia.
It purchased a majority stake in a Tunisian project last June which may contain about 2.1 billion stock tank barrels of oil, according to the company's interim results announcement. BGP, a subsidiary of China National Petroleum Corporation, has been brought on as technical consultants for operations at the site.
In addition to interests in oil wells in northeastern China, PetroAsian Energy also has business in paint production, chemical materials, and plastic colorants. It recorded a HK$101.6 million loss in the six months through September 30 last year, compared with a HK$146.9 million profit a year earlier.
Meanwhile, China Starch Holdings announced plans to raise as much as HK$380.7 million in net proceeds earlier this month by selling its shares at HK$1.40 apiece. It has since dropped and closed yesterday at HK$1.35.
Red-hot stock
Shares of PetroAsian Energy closed at HK$1.09 yesterday. So far this year, the stock has increased: 98.2%
