Global trading group Li & Fung is raising HK$3.88 billion from selling a 4.62 per cent stake to Singapore's Temasek Holdings, boosting its capital for acquisitions.
Li & Fung said it agreed to sell 168 million new shares at HK$23.09 each, a 2.39 per cent premium to the stock's closing price of HK$22.55 on Friday. The deal will make the Singapore sovereign wealth fund its second-largest shareholder after the Fung family.
'We are very pleased to have Temasek as one of our strategic shareholders in view of its long-term approach to this investment,' said William Fung Kwok-lun, the managing director of Li & Fung.
The deal may help restore some investor confidence in the group, whose shares have dropped 28.41 per cent this year amid an economic slowdown in the United States, its biggest market.
David Heng, the managing director of Temasek, said Li & Fung was a global leader in consumer goods sourcing and had excellent potential.
To increase income from outside the US, Li & Fung has been making acquisitions in other markets.