Guotai Junan plans HK$2b rights issue to boost loans business

Guotai Junan International, one of the largest mainland brokerages listed in Hong Kong, plans a rights issue to raise up to HK$2.04 billion on the basis of one rights share for every five existing shares at HK$5.30 per rights share.

The rights issue price represents a 10.47 per cent discount to the average closing price in the past 10 trading days of HK$5.92 per share.

The fully-paid rights shares will not be entitled to the interim dividend of 8 HK cents a share for the six months to the end of June that was announced earlier this month.

The estimated net proceeds of the rights issue will be not less than about HK$2 billion but no more than HK$2.04 billion after expenses.

The group said it wanted to use the funds for further development of its loans and financing business and other general corporate purposes.

Investors need to accept the offer and pay for the rights shares on or before 4pm on September 22.