IHD Holdings is to raise $405 million by placing 135 million new shares at $3 each to China Everbright Holdings. The issue price of the new shares is at a premium of about 12.15 per cent to the stock's closing price yesterday. After the deal, China Everbright will become the single largest shareholder of IHD with 27.8 per cent of the enlarged issued share capital. Net proceeds of the placement will be used to buy a 51.07 per cent stake in a joint-venture property project in Beijing with China Everbright, which has an estimated value of at least $793 million. The new shares represent about 31.16 per cent of IHD's existing issued share capital and 23.76 per cent of the enlarged issued capital, which will consist of 568.25 million shares. China Everbright holds about 5.3 per cent of existing IHD shares. IHD chief executive Ch'ng Poh, his spouse and associates, who hold 35.43 per cent of the company, will control only 27 per cent of the enlarged issued share capital. China Everbright has also expressed interest to keep its holding for long-term investment, according to a company statement issued last night. China Everbright is a company incorporated in Hong Kong and wholly owned by the State Council of China. It is the holding company of Everbright International - a public company in the territory. Mr Ch'ng will remain the chief executive of IHD and will keep his shareholding as a long-term investment. Everbright has strong connections in China and is principally engaged in investment holding, general trading, property development, securities dealing and bullion trading. It has also actively participated in direct investment and joint-venture investment in manufacturing, energy, transport, communication, and agricultural industry in Hong Kong and China.