Neo-China Group, a Hong Kong-listed mainland developer, scaled down its share placement by 36 per cent to HK$702 million after the stock market slumped yesterday, market sources said.
Neo-China cut the offering to 620 million new shares from an initial 950 million and priced the shares at HK$1.132 each, below the indicative price range of HK$1.143 to HK1.170 apiece, a fund manager involved in the transaction said.
The developer had originally hoped to raise as much as HK$1.11 billion through a share placement on Monday as it builds funds for expansion. JP Morgan is the sole pricing agent of the offering.
'It is not strange that the offering has to be scaled back in size. Investors always shy away from any fund-raising activities when a market correction occurs,' the fund manager said. 'It's time for them to take profit first.'
The Hang Seng Index lost 564 points to end at 18,639.53, the biggest one-day points drop since the September 11 terror attacks in 2001.
Neo-China raised HK$1.84 billion selling new shares and convertible bonds in the first half.
