China Merchants Hai Hong Holdings Co is re-inventing itself as an infrastructure play with the purchase of five mainland toll roads and a stake in China's largest container manufacturer in Shenzhen, funded by a $3.86 billion share placement. The red chip will also change its name to China Merchants International Co to reflect its new focus. Chairman Li Yinfei said it would continue to acquire assets with the aim of expanding its asset value and capitalisation. Infrastructure investment would represent 60 per cent of Hai Hong's total asset value, followed by its shipping and industrial interests, and would contribute about half net profit this year. Hai Hong, the Hong Kong listed flagship of the Ministry of Communications, yesterday announced asset-injection plans, ending a month of speculation that pushed its shares up 26 per cent. It placed 650 million new shares - equivalent to about 82 per cent of its existing share capital or 45 per cent of enlarged capital - at $6.03 each, a 7.94 per cent discount to Monday's close of $6.55. Its parent, China Merchants Holdings (CMH), has agreed to take up 390 million shares. The rest were placed by Peregrine Brokerage and Jardine Fleming. CMH will remain the largest shareholder with a 60 per cent stake. Mr Li said Hai Hong would invest the proceeds in five toll roads in southern and western China and buy a 23.73 per cent stake in Shenzhen-listed B share firm China International Marine Containers from a Hong Kong company for $320 million. Of the toll roads, two were bought from CMH's other Hong Kong listed vehicles - Union Bank of Hong Kong and China Merchant China Direct Investment (CMCDI). The two will sell their combined 33.4 per cent stake of National Highway 324's Loumei section in Guangdong to Hai Hong. CMCDI will also sell its 16.8 per cent stake in Zhangzhou-Zhaoan Highway in Fujian. 'We intend to make Hai Hong a conglomerate, including toll road investment. 'CMCDI will focus on other projects apart from toll roads, while Union Bank will concentrate on banking and financing,' Mr Li said. The other three roads - Guiyang-Huangguoshu Highway in Guizhou, Guilin-Liuzhou Highway in Guangxi and Ningbo-Zhenhai-Luotuo in Zhejiang - were bought from the parent. Mr Li said the Hong Kong stock exchange had not set restrictions or conditions on Hai Hong, although the deal was considered a substantial transaction. 'The only condition is that Hai Hong cannot spin-off its infrastructure business within one year,' he said. Mr Li dismissed market rumours that CMH wanted to inject its 20 per cent of Modern Terminal Limited (MTL) into Hai Hong. He said the group currently had no such plans. 'As Hai Hong will continue to develop into a conglomerate, we'll consider buying a stake in future,' Mr Li said. Hai Hong's current gearing is 38 per cent, which leaves room for further acquisitions with its cash holding.