Fabrics maker to use 30pc of proceeds for dividend payout
Pacific Textiles Holdings, a Hong Kong-based knitted fabrics maker, plans to indirectly use 30 per cent of the proceeds from its HK$2 billion initial public offering scheduled this month to pay out a special dividend to its current shareholders, according to its preliminary listing document.
The listing hopeful is offering 358.2 million new shares at between HK$4.15 and HK$5.50 per share, according to a sale document obtained by fund managers. The offering represents 25 per cent of its enlarged share capital, the minimum for a company of its size, according to stock exchange regulations.
If priced at the highest end, the firm could raise an additional HK$295 million by fully exercising a green-shoe option to expand the sale size by 15 per cent.
According to the document, some HK$762 million raised will be used to repay a loan secured from five banks.
With the proceeds intended to pay a HK$780 million special dividend for 2006 to its existing shareholders, the company will then borrow about HK$600 million in new bank loans a day after its trading debut. The new loans will have a three-year maturity at an interest rate of 49 basis points above the Hong Kong interbank rate.
