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China’s Country Garden Shares Plunge on Discounted Share Issue

The developer will issue 870 million new shares, or 3.6% of the enlarged share capital, at HK$3.25 each, to professional and institutional investors in the share sale


Country Garden financial situation is under a cloud as more debts must be repaid in coming weeks.
Country Garden's landmark East China Center Building in Zhenjiang, Jiangsu province is seen in this AFP file photo.

 

Stocks in Country Garden Holdings fell 15% on Wednesday after the Chinese property developer said it plans to raise HK$2.8 billion ($360 million) from a discounted share sale.

The issue would help refinance existing offshore debt, and for general working capital and future development purposes, Country Garden said.

The developer will issue 870 million new shares, or 3.6% of the enlarged share capital, at HK$3.25 each, to professional and institutional investors in the share sale, Country Garden said in a filing to the Hong Kong bourse.

The issue price represents a 12.6% discount to Tuesday’s close of HK$3.72 each, it added.

UBS is the placing agent.

In May, Country Garden responded to a government call to Chinese property developers to boost bond issuance.

It announced plans to sell up to 500 million yuan ($74 million) worth of onshore paper with inbuilt credit risk protection.

 

  • Reuters, with additional editing by George Russell

 

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China Country Garden Swoops in With Mini Buyback as Bonds Slump

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.