Shares of beleaguered developer Neo-China Land Group plunged 42.83 per cent yesterday when they resumed trading after a hiatus of more than two years.
Shanghai Industrial Holdings earlier announced it had completed the purchase of a controlling stake in the company. The stock fell HK$2.12 to HK$2.83, making it the market's biggest loser of the day.
Neo-China, which had been suspended from trading since January 22, 2008, said on Thursday night that Shanghai Industrial had paid HK$2.32 a share to acquire a 45.02 per cent stake in the developer through the purchase of both new and existing shares.
Shanghai Industrial will offer to buy all outstanding stock, convertible bonds and warrants, according to the announcement.
The completion came five months after Neo-China said it had agreed to make Shanghai Industrial its largest shareholder in a deal worth as much as HK$2.75 billion.
Ratings agencies changed their outlooks to positive after the investment. Standard & Poor's yesterday placed a 'CCC-minus' long-term corporate credit rating on Neo-China. It also placed a 'CC' rating on the developer's US$400 million senior unsecured notes due in 2014.