Developer Sunac China plans $580 mln share sale to repay loans

Developer Sunac China plans $580 mln share sale to repay loans
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The logo of Sunac China Holdings Ltd is seen during an exhibition in Hangzhou, Zhejiang Province, China, May 25, 2015. Photo taken May 25, 2015. China Daily / via REUTERS

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HONG KONG (Reuters) – Chinese real estate developer Sunac China Holdings Ltd (1918.HK) said on Thursday it plans to raise 4.52 billion Hong Kong dollars ($580.09 million) from the sale of shares to pay off loans and for general corporate purposes.

The Hong Kong-listed developer intends to sell 452 million new shares, or 8.3% of the expanded share capital, to controlling shareholder Sunac International Investment Holdings, it said in a filing to the Hong Kong Stock Exchange.

The new shares will be issued at HK$10 per share, which is a 15.3% discount from Wednesday’s closing price of HK$11.80 per share.

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Sunac shares fell 22% in afternoon trading to HK$9.2, versus a 0.2% drop in the broader market (.HSI).

A source close to Sunac told Reuters that the company has no other plan in the near term to float its shares or shares in its Sunac Services unit (1516.HK) to raise capital, adding that it has sufficient funds to meet its short-term debt obligations. A term for project development.

Sunak China did not immediately respond to a request for comment.

Sunac last issued new shares and sold a stake in Sunac Services in November to raise a total of $948 million.

Sunac Services notified investors Tuesday that it also has no plan to offer shares or new related-party transactions scheduled and will resume share buybacks, according to a report from brokerage Jefferies.

In the latest share offering, the controlling shareholder will buy the new shares after selling the same amount of the existing shares at the same price to the third party investors.

Morgan Stanley & Co. International plc is the offering agent.

(1 dollar = 7.7919 Hong Kong dollars)

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(Reporting by Donnie Kwok and Claire Jim.) Edited by Muralikumar Anantharaman

Our Standards: Thomson Reuters Trust Principles.


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