SHANGHAI Dazhong Taxi has priced its proposed rights issue at more than a 50 per cent discount to the share's market price in an apparent bid to prevent the issue from failing. China's first rights issue involving foreign investors, by Shanghai Vacuum Electron Devices, has been consistently deferred because of improper pricing arrangements. Last Wednesday, the taxi operator approved a one-for-one rights issue during the company's annual general meeting. Company official Wang Zhengguo said in Shanghai yesterday that the rights issue would be priced at four yuan a share for domestic investors, and 49.17 US cents for overseas investors. But Mr Wang said the price would be subject to adjustment and would hinge on the approval of the securities authorities in Shanghai. A detailed proposal for the rights issue would be released by the end of the month. The issue price of four yuan represents a steep discount of 87.44 per cent to the company's A-share close of 31.85 yuan yesterday, while the US equivalent was at a 57.24 per cent discount to its B-share close of $1.15. The steep discount is apparently attractive for investors compared with that offered by Shanghai Vacuum Electron Devices. Mr Wang said the company hoped the favourable terms would attract shareholders. The state, which Mr Wang said would not subscribe for the rights shares, owns 59.3 per cent of the company which has an issued share capital of 85.9 million shares. The rights issue will require the creation of 34.96 million new shares, assuming they are fully taken up by shareholders other than the government. At four yuan per share the issue would raise 140 million yuan.