Shares of Renhe Commercial Holdings, an operator of underground shopping malls on the mainland, dropped nearly 15 per cent yesterday after a group of company investors reaped HK$680 million from a quick sale of a 2 per cent stake in the firm.
The stock rose as much as 2 per cent in the morning session but dropped 20 per cent to an intraday low of HK$1.55, following the completion of the share sale after the market opened for afternoon trade. The investors sold the shares at an 8.6 per cent discount to the stock's morning close of HK$1.86.
The group of investors mandated Morgan Stanley to offer 400 million Renhe existing shares to institutional investors at an offer price of HK$1.68 to HK$1.72 per share, according to a sale document obtained by fund managers.
Morgan Stanley sounded out the market after it closed for lunch, and completed the share sale within 1 1/2 hours by fixing the price at HK$1.70, the mid-range of the offering, sources said. Renhe shares closed at HK$1.65, down 14.9 per cent.
The vendors included Ever Union Capital, which owned a 0.65 per cent stake in the firm, and Bookman Properties and Rich Crown, with undisclosed stakeholding in the company.
It was the second time Renhe investors have tapped the local equity market in a week to raise a combined total of HK$1.144 billion.
Five undisclosed shareholders of Renhe cashed in HK$756 million from a 450 million share sale last Thursday.