Velocity leads firms in raising HK$1.2b

Placements seize on surge in stock prices

Small- and medium-sized companies including China Velocity Group, Hembly International Holdings, China Chief Cable TV (CCCTV) and Forefront International raised a combined HK$1.2 billion yesterday through share sales in Hong Kong, taking advantage of a surge in equity prices.

China Velocity raised as much as HK$615 million in a placement to fund new investment in the mainland after its shares more than tripled in the past three months, market sources said.

The Hong Kong property developer sold up to 300 million new shares, or 52 per cent of its enlarged share capital, at HK$2.05 each, near the lower end of the HK$2 to HK$2.30 indicative range.

The price was at a 29.55 per cent discount to the stock's closing price of HK$2.91 yesterday.

Chan Yeung-nam, the company's largest shareholder with a 74.89 per cent stake who resigned as chairman and executive director last week, agreed not to sell his shares within 12 months, according to the term sheet.

China Velocity, which reported a loss of HK$18.2 million last year, has a market capitalisation of HK$807 million based on yesterday's closing price. Cazenove Asia was the bookrunner for the placement.

In May, the company, which owns property developments in Shenzhen and restaurants in Beijing, announced plans to buy a 90 per cent stake in an enterprise that owns a mainland wet market operation for HK$1.16 billion.

Apparel and accessories supplier Hembly International raised HK$102 million by selling 23.8 million new shares, or 8.55 per cent of its enlarged share capital, at HK$4.29 each.

The sale boosted the firm's funds for potential acquisitions. Hembly shares have jumped 70 per cent in the past three months.

Media services company CCCTV raised HK$71.25 million by selling 62.5 million new shares at HK$1.14 each, or a 15.6 per cent discount to the stock's last closing price of HK$1.35 on Tuesday.

The funds will go to working capital or to acquiring a home shopping channel, the listed firm said. Shares of CCCTV have risen 145 per cent over the past month.

Forefront International, a motor truck trading company, raised HK$87.3 million selling 229.9 million new shares, or 16.67 per cent of its enlarged share capital, at 38 HK cents each.

The stock has gained 24 per cent over the past month.

The proceeds raised would be used as general working capital and for developing logistics-related business, Forefront said.

Meanwhile, juice concentrate producer Yantai North Andre and health-care company Golden Dragon have raised a combined HK$258 million from new share placements, market sources said.

Driven by growth

The sale proceeds boost Velocity, Hembly and CCCTV's war chests

The estimated size of China Velocity's stock placement, in shares 300m