Kingway Brewery, a mainland beer maker in which Heineken owns 20 per cent, has proposed to raise about HK$757 million by selling rights shares to fund construction of new plants.
Kingway will sell at least 310 million rights shares at HK$2.42 each on the basis that holders of every nine existing shares are entitled to buy two. HSBC is arranging the sale.
Funds raised from the sale would be used to finance a HK$338 million project in Foshan and the HK$194 million brewing plants in Chengdu, Xian and Tianjin.
The company would use the remainder of the proceeds to repay bank loans and for working capital.
Shares in Kingway fell 2.15 per cent, closing at HK$3.18 yesterday when trading resumed from a one-day suspension.
Kingway, a smaller rival to Tsingtao Brewery and Beijing Yanjing Brewery, has been adding capacity, hoping to tap the mainland's rising beer consumption.