AviChina Industry & Technology, an aircraft and components manufacturing conglomerate, has raised at least HK$698 million by selling new shares to institutional investors and will use the proceeds to fund potential acquisitions.
The Hong Kong-listed arm of state-owned Aviation Industry Corporation of China (Avic) sold 196.7 million new shares at HK$3.55 each, a 12.6-per-cent discount to its last traded price of HK$4.06, a term sheet sent to investors said. A person familiar with the deal said the order book had been covered.
If demand exceeds the shares on offer, AviChina has an option to sell another 65.5 million shares to raise an additional HK$232.5 million.
Trading of AviChina shares was suspended yesterday pending completion of the share sale. Its share price has more than doubled since bottoming at HK$1.98 in late September, when the equity market was troubled by the European sovereign debt crisis.
The shares were to be sold to not more than 10 investors who pledged not to sell the shares for at least three months. BOC International was the sole book-runner.
The proceeds will fund possible acquisition of aviation assets and general operational use.