Rights issue targets China's 10m new homes

China State Construction International Holdings plans to raise at least HK$3.58 billion through a rights issue to build more infrastructure projects on the mainland, the firm announced yesterday.

Shares of the construction firm, a subsidiary of state-owned China Overseas Holdings, fell 2.8 per cent to HK$7 yesterday.

CSC will issue 597.36 million rights shares at HK$6 each, with one for every five existing shares. The rights shares will account for 16.67 per cent of the company's enlarged share capital. The rights shares will start trading on May 18.

'The fund-raising can augment the financial position of the company and enable it to capture more investment opportunities in infrastructure projects in China. The company will actively explore the feasibility of acquisition of infrastructure projects in the mainland from its parent company in search of new engines for profit growth,' said CSC.

China Overseas Holdings, which owns 61.9 per cent of the Hong Kong-listed firm, is in turn a subsidiary of China State Construction Engineering Corporation, a Shanghai-listed state-owned construction conglomerate.

On March 10, Beijing announced that 1.3 trillion yuan (HK$1.5 trillion) would be spent on building 10 million affordable homes this year.

'CSC will grasp the great opportunity brought by the country's plan to build 10 million units of affordable housing,' the company said.