An investor in Beijing-based property developer Sino-Ocean Land Holdings planned to raise as much as HK$622.4 million in a share placement after the market closed yesterday, taking advantage of the recent rally, sources said.
Jolly Eagle, owned by Pacific Alliance Asia Opportunity Fund, offered to sell 80 million Sino-Ocean shares at between HK$7.63 and HK$7.78 each, according to an e-mail sent to fund managers.
The offering represents 1.8 per cent of Sino-Ocean's existing share capital. Jolly Eagle was an initial investor in the developer with a 2.79 per cent stake.
Goldman Sachs is arranging the sale. The Wall Street bank and Morgan Stanley also handled Sino-Ocean's HK$11.9 billion initial public offering last year.
Shares of Sino-Ocean sank to as low as HK$4.99 last month but have since rebounded to close at HK$8.10 yesterday.
The placement came one week after the lock-up period on Jolly Eagle's stake expired on March 27.
Other cornerstone investors, including hedge fund firm OZ Management, Government of Singapore Investment Corp and Hong Kong-listed HKR International, are also expected to divest their interests while the stock price remains firm as the long-term prospects for the mainland property market are still cloudy.
Sino-Ocean sold US$240 million worth of shares to cornerstone investors during its initial public offering.
'The China property market is unlikely to get out from under the current plight. Because of the high inflation, the central government will probably use another rate rise to cool down the economy, which is bad news for developers,' said a fund manager.
Evergrande Real Estate Group, a Guangzhou-based developer, scrapped a HK$16.5 billion initial public offering two weeks ago because of the lukewarm response from institutional and retail investors.
Jolly Eagle pares down original investment after lock-up period expires
The investor's placement after the market close seeks to raise, in HK$622m