Sunac shares plunge after China’s third largest developer plans to raise US$580 million from share placement
- Sunac will place 452 million shares at HK$10 per share, with half of the funds to be used to repay loans
- The stocks closes 22.6 per cent lower at HK$9.13 in Hong Kong
Sunac China Holdings slumped after it announced a HK$4.52 billion (US$580 million) share placement, as the mainland’s third largest developer tries to ring-fence itself from the debt crisis surrounding Chinese property companies.
The Hong Kong-listed company will place 452 million shares at HK$10 per share, representing 9.1 per cent of its existing share capital. Half of the proceeds will be used repay loans, it said.
Average home prices are forecast to fall 1 per cent in the first six months this year, according to 14 analysts and economists surveyed by Reuters late last year.
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Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt
Chinese developers have bore the brunt of Beijing’s tight property policies to curb speculation in the market, with the “three red lines” thresholds on borrowings pushing them to the brink. As a result companies have resorted to taking various measures to raise funds, including assets disposals, sales of stakes in subsidiaries and share placements.