SOUTH China Holdings has placed out 20 per cent of South China Industries (SCI) privately, raising $87.34 million to invest in mainland manufacturing. The issue of old shares in SCI, formerly known as Wah Shing Toys, has diluted the holding of parent company South China Holdings from 64.7 per cent to 53.89 per cent or 239.37 million shares. In total 74.02 million old 10-cent shares were placed at $1.18 a share, a 4.07 per cent discount to the share's close yesterday. South China Securities and HG Asia were placing agents with management from South China Capital. The company is taking up new shares at $1.15 a share, a price arrived at after taking into account the placement price and the $2.3 million in expenses, a company statement said last night. The shares were placed with independent third parties, according to a South China director, mostly overseas. ''The purpose of the transaction is to finance the proposed acquisition of toy, watch and micro-motor manufacturers in the PRC,'' a company statement said. Subscription of the shares is conditional upon approval by the Securities and Futures Commission's takeovers and mergers executive and the stock exchange listing committee. Shareholder approval is not required following the granting of a mandate awarding such powers in July last year. In December the company announced the taking of a 51 per cent stake in Xianda Industrial - a joint venture toy, shoe and watch maker in Guangzhou - in a 26 million yuan (about HK$34.78 million) deal to upgrade equipment and expand existing production lines. The company is being developed into a diversified mainland China manufacturing operation led by chairman Robert Ng Hung-sang and director Christine Cheung.