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Bien Perez

Mainland logistics provider and toll road operator Shenzhen International Holdings is gearing up to expand its operations after the successful placement of existing shares and subscription for new shares to raise almost HK$2 billion in fresh funds.
Under that transaction conducted on Tuesday, Ultrarich International, a substantial stakeholder in Shenzhen International, sold 176 million of the shares it held in the company at HK$11 per share.
Ultrarich also agreed to subscribe to 176 million new shares, priced at HK$11 each, issued by the company.
The shares placed represented 9.31 per cent of the existing issued share capital of Shenzhen International as enlarged by the issue of the new shares Ultrarich subscribed to.
Morgan Stanley, JP Morgan and UBS served as placing agents.
In a regulatory filing yesterday, Shenzhen International chairman Gao Lei said the gross proceeds of the placement and subscription totalled HK$1.94 billion.
Gao said the net proceeds of HK$1.9 billion, after deducting all applicable costs related to the placing and subscription, would be applied to the expansion of the company's logistic business, particularly its so-called "China Urban Integrated Logistics Hub" network, as well as general corporate purposes.
The share placement, however, left investors unimpressed. Shenzhen International saw its shares fall 5.3 per cent to HK$11.38 at the start of trading yesterday, marking the stock's biggest intraday decline since May 20. The stock closed 4.99 per cent lower at HK$11.42.
The company, which also operates ports and owns various so-called logistic parks in major mainland cities, has signed investment agreements for projects under its China Urban Integrated Logistics Hub network.
These projects are spread across key logistic gateway cities, including Shenyang, Wuxi, Wuhan, Tianjin and Shijiazhuang. The area covered by the projects total 3.11 million sq metres, of which 1.54 million sq metres are owned by the company.
Building such a network of logistics facilities will support growing industry requirements. A report by management consulting firm AT Kearney said: "As Chinese companies expand rapidly, their logistics requirements will expand beyond the coastal cities, with broader national network coverage and consistent, reliable service becoming key differentiators."
Shenzhen International saw its recent interim net profit increase 39 per cent to HK$1.19 billion, up from HK$857.54 million a year earlier, on solid revenue growth by its logistics business and toll road operations.


Shenzhen Int'l eyes logistics business expansion after shares sale

Shenzhen International Holdings is gearing up to expand operations after fund raising exercise. Photo: Bloomberg

Business

China Business

Mainland logistics provider and toll road operator Shenzhen International Holdings is gearing up to expand its operations after the successful placement of existing shares and subscription for new shares to raise almost HK$2 billion in fresh funds.
