Wing On places shares to fund Kingsway Hotel deal

Wing On Travel (Holdings) is expected to conduct a $168 million top-up share placement to fund its acquisition of a stake in a Macau hotel, according to market sources.

The travel agency and hotel operator, which on Thursday said it would spend $157.5 million to acquire 34.24 per cent of Kingsway Hotel, planned to place about six billion existing shares at 2.8 cents each, sources said yesterday.

The company's share price rose 77.27 per cent between November 10 and 24, amid a Macau concept boom on the Hong Kong market in which several penny stocks have soared in value on the back of press releases claiming business opportunities in the former Portuguese enclave.

The stock then dived 28.21 per cent on Thursday to close at 2.8 cents after the Securities and Futures Commission said it would demand further clarification from certain companies issuing statements on Macau investment plans.

The SFC's action was prompted by the rush of speculative activity in the stocks seen in the past few weeks that has sent their prices sky-high.

Shares in Ruili Holdings, whose chairman Lawrence Yu Kam-kee is also the chairman of Wing On Travel, fell 19.05 per cent on Wednesday and 44.12 per cent on Thursday after it denied rumours that it had had negotiations with tycoons Lam Kwok-thai and Cheng Yu-tung over a possible casino partnership.

Ruili's share price had surged 320 per cent between November 10 and 23 because of the rumours that it was in talks over the acquisition of hotel and entertainment businesses in Macau.