Haidilao slides on US$300 million stock placement plan following decision to shut one-fifth of hotpot restaurants
- Company to make a top-up placement to billionaire co-founder Shu Ping, who concurrently plans a stake to undisclosed buyers
- Stock slumped by 9 per cent on the placement news, bringing the losses to 32 per cent slide over the past one month
The company plans to issue 115 million new shares at HK$20.43 each to SP NP Ltd, a vehicle controlled by one of its billionaire co-founders Shu Ping, according to a Hong Kong stock exchange filing early Friday. The price is about an 8 per cent discount to the stock’s closing level on Thursday.
The top-up issue, about 2 per cent of the company, follows a concurrent plan by the shareholder to sell the same number of shares at the same price to undisclosed buyers. Shu Ping and her husband Zhang Yong, the fourth richest Singaporeans according to Forbes, effectively control more than 55 per cent of the Beijing-based hotpot chain operator.
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Haidilao sank 9 per cent to HK$20.20 in Hong Kong in Friday trading, while the benchmark Hang Seng Index advanced 0.3 per cent. The stock has declined 32 per cent over the past one month, wiping out more than US$5.5 billion of market value, according to Bloomberg data.
The group plans to use 60 per cent of the proceeds to repay bank borrowings and enhance its supply-chain management, and the balance for working capital. Any unused portion would be retained as short-term deposits or invested in wealth management products, it added.
