Dransfield Holdings' Nasdaq-listed subsidiary plans to cash in on the sharp jump in its share price following the Sino-US World Trade Organisation accord by selling new shares for up to US$22 million.
Dransfield China Paper, a manufacturer of tissue papers in the mainland, saw shares hit a record high of US$11.12 on Wednesday since it went public in April 1997.
This compares with its average for the previous year of US$1.39 on that day amid a buying flurry of mainland-related stocks in the US market.
Based on yesterday's closing price of US$7, Dransfield China's market capitalisation was about HK$800 million, bigger than the parent's HK$150 million market capitalisation on the day's close of 11.19 HK cents.
The group's director Warren Ma Kwok-hung believed the shares rose on expectations that Dransfield China would benefit from lower import taxes.
He said the fund-raising would be conducted 'as soon as practicable' to complete work on paper mills in Guangzhou and Jiangsu after progress was stalled by a lack of funding and the Asian financial crisis.
