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Chinese electronics chain Gome Retail seeks US$574 million from sale of new shares as disgraced founder Huang Guangyu vows to restore its former glory
- Gome Retail said it plans to place 2.28 billion shares, or 10.58 per cent of its existing shares, at HK$1.97 per share to repay debt and to expand its business
- Huang, who served 10 years in prison for insider trading and corporate bribery, has vowed to restore his firm’s fortunes within 18 months
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Chinese electronics chain Gome Retail is seeking to raise HK$4.45 billion (US$573.7 million) from the sale of new shares after its founder Huang Guangyu pledged to return his company to its former glory after completing his parole last month.
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Gome Retail said it plans to place 2.28 billion shares, or 10.58 per cent of its existing shares, at HK$1.97 per share to repay debt and to expand its online and offline dual-platform business, in a filing to the Hong Kong stock exchange on Tuesday.
The offer represents a 15.09 per cent discount on its last trading price.
The top-up placement will allow Gome Retail to raise money quickly from investors as part of its bid to return to its illustrious past. The company has struggled since its chairman was jailed for financial crimes in 2010.
“We will try to resume our original market position within the next 18 months,” said Huang, 52, in his latest speech to Gome’s management, published by the company on WeChat on February 18.
The comeback will not be easy as China’s retail environment has undergone massive changes.
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