CSI Properties became the latest Hong Kong-listed developer to head to the equity markets for new capital today when the company announced a HK$442.4 million (US$71.98 million) placement of new shares.
The developer controlled by Mico Chung Cho-yee said that it is selling 1.3 billion new shares at HK$0.35 per share – 10.26 percent less than the stock’s closing price on Wednesday, according to an account in the South China Morning Post.
In a statement to the Hong Kong stock exchange, CSI said that it would put its new cash to work paying off debt, and making new real estate investments in Hong Kong and Macau.
CSI shares closed today at HK$0.335 per share, down 14 percent from Tuesday’s closing price of HK$0.39 per share.
CSI Joins Country Garden and Yuexiu in Rush to Equity Markets
Opportunities to buy new shares seem to be becoming more frequent recently with mainland developers Country Garden and Yuexiu Property both announcing rights offers in the last 30 days.
Country Garden said that its new offering of 1.27 billion new shares at HK$2.50 was necessary to refinance existing debt, including bonds maturing this month. The deal was announced by Guangdong-based Country Garden on August 28th.
Yuexiu Property announced its own HK$3.84 billion ($495 million) rights issue on September 7th, sayig that the new equity was necessary to help pay down existing debts and to provide cash for future expansion. The developer had a net gearing ratio of 62.7 percent at the end of June.