Red chip Legend Holdings is to raise $1.65 billion through a share placement to invest in Internet-related businesses. Parent Legend Group - controlled by the Chinese Academy of Sciences - will raise $1.15 billion by selling 85 million existing shares in the listed company at $33.75 each to international institutional investors. Fifteen million of the shares will be sold if lead manager Goldman Sachs exercises an over-allotment option. Legend Group will then subscribe to 50 million new Legend Holdings shares at $33.75 each. This is the second large share placement by the mainland computer manufacturer's parent since a $936 million issue in June last year. The placement price represents a discount of 6.25 per cent to Legend Holdings' closing price of $36 yesterday. The counter surged 10.7 per cent yesterday amid a strong recovery in technology-related shares after a sharp correction last week. The red chip has gained 92.9 per cent in the past month amid strong investor sentiment towards the mainland's No 1 computer seller. 'Demand of the offer has been very strong, at a time when technology stocks have been a little queasy,' Goldman Sachs spokesman Peter Ross said. Legend Group's shareholding will be diluted to 57.1 per cent from 60.7 per cent after completion of the placement and over-allotment issue. Mr Ross said Legend Group had agreed not to dispose of any additional shares in the company for 90 days after completion of the placement. The company said the placement would take place by March 13 at the latest. Legend Holdings said it had earmarked 45 per cent of its $1.65 billion net proceeds for the acquisition of, and investment in, Internet content providers or the purchase of the right to use their content. Another 20 per cent will be used for the development of Internet access devices and related services, and a further 20 per cent for e-commerce development. The remaining 15 per cent will be retained for the company's working capital. Legend Group said it would use its $1.15 billion proceeds for technology development projects and venture capital investment. Legend Holdings is expected to announce soon the formation of an alliance with Internet investment firm Pacific Century CyberWorks to promote high-speed multimedia services. The alliance would involve dual marketing of Legend's personal computers with CyberWorks' planned pan-Asia multimedia network. According to research house International Data Corp, Legend had a 27.3 per cent share of the mainland personal computer market in the fourth quarter of last year.