New | China Taiping Insurance shares dive on rights issue plan
Shares in China Taiping Insurance Holdings slipped as much as 16 per cent on Monday morning after the company announced the plan for a HK$6.4 billion rights issue.
The insurer said on Friday night that the offer was for 21 rights shares to be issued for every 100 shares held at a subscription price of HK$11.89 each.
The rights issue would represent 17.4 per cent of the company’s total number of issued shares after its completion, said China Taiping.
The stock ended the morning session at HK$16.06, down 10.5 per cent, compared with a drop of 0.6 per cent in the Hang Seng Index.
China Taiping said the proceeds would be used to finance the group’s general working capital “in order to support the continuing development and growth of its business”.
Its Hong Kong unit, China Taiping Insurance Group (HK), will spend HK$4.4 billion on the rights issue, in proportion with its shareholding.
The proceeds of the issue would be used to repay a shareholder’s loan of US$570 million, the company said.
