Shares of Wharf (Holdings) edged up yesterday despite Thursday's announcement of a potential HK$10.05 billion rights issue that could hurt earnings per share.
The developer, which is 50.2 per cent controlled by Wheelock and Co, saw its shares hit an intraday low of HK$50.45, down 4.9 per cent, in the morning. However, the stock bounced back in the afternoon to close the day 5 cents, or 0.09 per cent, higher at HK$53.10. It is still down 11.2 per cent so far this year.
Wharf said it intended to use the proceeds from the rights issue to finance additional property and related investment on the mainland. It planned to issue 275.39 million rights shares in the proportion of one rights share for every 10 existing shares held at HK$36.50 each.
The issue price represented a 31 per cent discount to the previous close, the company said.
Wheelock is the underwriter of the issue. Stephen Ng Tin-hoi and T.Y. Ng - both directors of Wharf - together with Wheelock agreed to subscribe 137.84 million shares, or 50.06 per cent of the rights issue.
According to the statement, any shares not taken up by the market will be taken by Wheelock.