HKC placing HK$668m of shares to bolster war chest

Shares of HKC (Holdings), the Hong Kong-listed property flagship of Indonesia's Widjaja family, surged 28.93 per cent yesterday on news of a planned HK$668.42 million share placement to fund mainland real estate and wind power projects.

HKC plans to issue 607.66 million new shares, or 16.66 per cent of its enlarged share capital, to about six investment funds at HK$1.10 each in its first equity fund-raising in more than 10 years.

The stock surged 35 HK cents to HK$1.56 yesterday even though the share sale price was at a 9.09 per cent discount to its price of HK$1.21 on Wednesday before it was suspended from trading on Thursday.

Chief executive Eric Oei Kang, the grandson of 83-year-old Eka Tjipta Widjaja, whose family has invested 65 billion yuan in the mainland's paper and pulp and property markets since 1989, said yesterday the fresh fund will boost the company's cash reserve to HK$1.2 billion.

The war chest would meet the group's HK$1 billion capital requirement in the next 12 months, he said.

'We will boost further our war chest by selling some non-core assets such as some idle land in Jiangmen, which will generate another HK$300 million to HK$500 million in the next six months,' Mr Oei said.

The Widjaja family controls Asia Pulp & Paper, Southeast Asia's biggest defaulter which is still working on a debt revamp after freezing payments on US$14 billion of debt in 2001.