Henderson Development pays HK$10b to exercise warrants
Peggy Sito and Sandy Li
Henderson Land Development yesterday said its parent company paid HK$10 billion to exercise warrants for 172.41 million Henderson Land shares at HK$58 each.
The developer said the parent, Henderson Development, controlled by the family of Henderson Land chairman Lee Shau-kee, also bought 28.24 million shares from the stock market between March 18 and April 11.
Together with yesterday's exercise of warrants, Henderson Development has now increased its holding in the listed developer by 200.66 million shares.
This means the Lee family, through Henderson Development, has increased its stake to 59.2 per cent from 55 per cent of the developer's enlarged share capital.
A warrant gives the holder the right to buy the underlying stock at a predetermined price.
In March last year, Henderson Land announced a bonus warrants issue on the basis of one warrant for every five shares held.
The warrants entitled the holders to subscribe to a total of up to 429.34 million shares at an initial subscription price of HK$58 per share.
The company said then that if its plan to raise funds through the warrants issue failed, Henderson Land might either slow talks with the government regarding land premiums for farmland conversions on land it owned or borrow from banks if it received an attractive land premium offer.
'It's a positive move as it will shore up the balance sheet of Henderson Land,' said Paul Louie, an analyst at Nomura International.
The move will reduce Henderson Land's net debt from HK$44 billion to HK$34 billion.
Henderson Land shares lost 2.05 per cent to HK$54.75 yesterday. The stock has risen 20 per cent since March 17, the day before Lee started adding to his stake in his company.
Louie said the drop in Henderson Land share price yesterday was unrelated to Lee's decision to exercise the warrants.
'It was more due to the market correction as the prices of other property stocks also fell.'
Sun Hung Kai Properties fell 1.64 per cent to HK$135.60 while Cheung Kong (Holdings) edged down 0.77 per cent to HK$127.90.
Henderson Land yesterday said its parent planned to make further acquisitions of the company's shares either at reasonable prices in the market or through the exercise of remaining warrants.
Since March 18, Henderson Development has bought this many shares in the developer on the market: 28m
Henderson Land's warrants, which allow holders to buy at a set price, were issued at, in HK dollars: $58