China Travel International Investment Hong Kong (CTII) has become the latest red-chip company to take advantage of the share market's recent strength by launching a placing and subscription deal to raise $2.52 billion to fund purchases from its mainland-backed parent.
The move will boost CTII's war chest from $3.4 billion to $6 billion and is part of its plan to accelerate growth and diversify earnings through acquisitions in a bid to move into the fast lane along with other red-chip companies.
The placing deal, arranged by Goodwill Investment Services, CEF Capital and Jardine Fleming Securities, comes five months after the company raised $790 million in a placement in August.
The company said yesterday its majority shareholder, China Travel Service (Holdings) Hong Kong, would sell 420 million existing shares to institutional investors at $3.60 each and subscribe for 700 million new shares at the same price.
The placing and subscription issue represent 18.5 per cent and 30.8 per cent of the existing share capital, respectively.
The placing price represents a 4.6 per cent discount to the stock's last close at $3.77 yesterday morning.