Country Garden’s US$3 billion fundraising plans hit market
China’s largest property developer plans to place 460 million shares and issue HK$15.6 billion worth of convertible bonds, triggering a retreat in Hong Kong stocks from record levels
Plans by Country Garden Holdings to raise HK$23.5 billion (US$3 billion) from a placement of 460 million shares and issuing convertible bonds triggered a plunge in its shares on Wednesday, which was a major drag on Hong Kong’s Hang Seng Index.
Shares in China’s largest property developer by sales slid 6.6 per cent at the opening to HK$16.48. By close, they were down 5.5 per cent to HK$16.8.
It was the biggest loser among index constituents and proved to be a drag on the Hang Seng, causing 23 points in losses by the market close. Still, the benchmark index closed higher at 31,983.41, as a rally in Tencent helped offset losses.
Country Garden was also the most heavily traded stock on the market, with a turnover of about HK$12 billion on Wednesday.
The developer became a Hang Seng Index constituent in November, with a 1 per cent weighting.
Country Garden will place 460 million shares at HK$17.13 apiece with at least six independent investors, reflecting a 3.7 per cent discount to its Tuesday closing price, according to its filing. These shares make up around 2.16 per cent of the company’s existing share capital and 2.12 per cent of the enlarged share capital after the completion of the deal.