HNA’s listed arm proposes HK$9.26b rights issue to fund Kai Tak land purchases

Money raised will fund the purchase of two plots of land on Hong Kong’s former airport site

PUBLISHED : Wednesday, 29 March, 2017, 4:16pm
UPDATED : Wednesday, 29 March, 2017, 11:11pm

Hong Kong International Construction Investment Management Group, a listed unit of HNA Group, has proposed a two-for-one rights issue to raise about HK$9.26 billion to fund the acquisition of two land sites at Kai Tak that it bought over the past two months .

The company said it would issue about 2.27 billion rights shares at HK$4.08 each. The price represents a 0.99 per cent premium to the company’s closing price of HK$4.04 on Tuesday, according to the filings to the Hong Kong exchange on Wednesday.

HNA Finance I, a wholly owned subsidiary of the HNA Group and the controlling shareholder with 66.64 per cent of the existing issued shares, has irrevocably undertaken to subscribe to the rights shares.

Assuming no shareholders other than HNA subscribe to the shares, HNA Finance’s holding in the company will increase to 75 per cent.

Hong Kong International Construction said the money raised will be partly used to fund the acquisition of two parcels of land at Kai Tak, former site of the city’s airport, that were purchased for HK$12.97 billion through government tenders in the past two months.

HNA Group pays HK$7.44b for fourth plot of land at former site of Hong Kong airport

Through its subsidiary Top Genius, the company bought a Kai Tak site for HK$5.53 billion in February and a second site in March for HK$7.44 billion through subsidiary Milway. The purchases have brought the entire HNA Group’s total investment at Kai Tak to HK$27.2 billion over four months, giving the company a total of 398,268 square feet of land.

HNA plans to combine all four sites under one development project for the purpose of constructing an integrated residential complex.

After combining four sites into one large plot, it will yield a total gross floor area of 2.02 million sq ft with an average land cost of HK$13,416 per square foot.

Meanwhile, the company proposed to increase its authorised share capital from HK$200 million divided into two billion shares, to HK$600 million divided into six billion shares.

Shares of Hong Kong International Construction Investment closed down 3.22 per cent HK$3.91 on Wednesday.