Listing rules behind Paramount decision to cancel share top-up
Paramount Publishing Group has clarified its decision to cancel an $855 million share placement plan.
Trading in Paramount's shares was suspended yesterday at the company's request, pending an announcement on the cancellation.
The company, the Internet arm of media owner Jimmy Lai Chee-ying, said in its clarification that its newly listed status limited its means of raising additional capital under stock exchange rules.
Paramount said its board of directors had decided not to proceed with the proposed top-up placing or any other fund-raising exercise at present, pending the outcome of further discussions with its advisers and regulatory authorities.
'In light of the company's newly listed status, the capacity and means of raising additional capital are more limited under the rules governing the listing of securities of the Stock Exchange of Hong Kong Limited than for more established listed companies,' it said.
Vickers Ballas Securities and Lehman Brothers acted on behalf of Paramount on Monday to test the market appetite for the placement of 300 million new shares at $2.85 a piece. The $855 million proceeds were to be used to pay for the acquisition of Appledaily.com, owned by Paramount's largest shareholder, Next Media International Holdings.
The exercise was not carried out as planned because the stock exchange did not grant a waiver allowing the placement to proceed.
The waiver was needed because Mr Lai made a commitment last October not to dispose of any Paramount shares placed to him within six months of its official takeover by Next.
Paramount said yesterday it would continue to explore the possibility of raising finance.
In regards to the proposed acquisition, it said negotiations were continuing positively.
Trading in Paramount shares will resume today.
PLACEMENTS
