Red chip Cosco International Holdings will issue about 300 million new shares to its parent Cosco (Hong Kong) Group at $4.38 each in exchange for an office property and a mainland power plant. The new shares, worth $1.31 billion, will fund the two acquisitions which will cost about $2 billion. The shortfall will be financed by internal resources and other channels. The issue price represents a discount of 10.6 per cent to the stock's last closing price of $4.90 on Wednesday. Cosco (Hong Kong) yesterday placed 100 million Cosco International shares at the same price to raise $438 million. The shares were sold to international institutional investors and the placement was three times subscribed, according to arranger ABN-Amro Rothschild. The brokerage said Cosco International would buy a 48.6 per cent stake in a Henan power plant from its parent for about $500 million and eight floors of office space - with a gross floor area of 176,000 square feet - at Cosco Tower in Sheung Wan for about $1.5 billion. The remainder of the purchase price would be financed internally as Cosco International raised $514 million via a previous share placement in October. Sources said the Sheung Wan office properties were almost fully leased and had generated a favourable rental income. The parent's stake in Cosco International will rise to about 61 per cent from 59.5 per cent. The group, the Hong Kong commercial arm of China Ocean Shipping (Group) Co, bought Cosco International - formerly Shun Shing Holdings - last year as its property arm. It is also the holding company of red chip Cosco Pacific.