Sun Hung Kai & Co, one of Hong Kong's top three brokers, plans to raise HK$1.91 billion to buy shares in a subsidiary and boost its working capital by selling new shares to Dubai Ventures.
The brokerage notified the Hong Kong stock exchange that it would sell 166 million shares to Dubai Ventures at HK$11.50 each, an 8 per cent discount to its stock's closing price on Wednesday. The deal will result in Dubai Ventures owning 9.9 per cent of the firm's enlarged share capital and its major investor Allied Properties seeing its stake drop to 58 per cent from 64 per cent.
'We view the deal as a positive move for Sun Hung Kai,' said Stanley Chan, an analyst at 3V Capital, a Hong Kong investment firm that owns 10 per cent of the group.
'The deal has enlarged the capital of the company and also broadened the investor base.'
Shares of Sun Hung Kai closed at HK$13.40 yesterday for a gain of 7.2 per cent. They have risen 74.89 per cent this year.
Sun Hung Kai will use HK$536.5 million of the funds raised to buy shares of its subsidiary Tian An China Investments so as to maintain its 35 per cent stake in the latter.
