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China property
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Chinese developer Yuexiu seeks to raise about US$1 billion via rights issue to expand in Greater Bay Area, key cities

  • Eligible shareholders can subscribe around 929 million rights shares for HK$9 each, a 28.3 per cent discount from the latest closing price
  • The Guangzhou government-backed developer plans to use the proceeds on further investment in the Greater Bay Area and eastern China

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Yuexiu Property is controlled by the Guangzhou city government. Photo: Lam Ka-sing
Elise Makin Beijing

Yuexiu Property is looking to raise HK$8.36 billion (US$1.07 billion) in capital by way of a rights issue to expand in the Greater Bay Area and eastern cities, according to an exchange filing on Thursday in Hong Kong.

The Guangzhou government-backed developer plans to use the proceeds on “further investment in core cities in the Greater Bay Area, the eastern China region and other key provincial-capital cities, and for working capital as well,” it said in the filing.

Eligible shareholders can subscribe around 929 million rights shares, representing 30 per cent of the company’s issued shares, for HK$9 each, a 28.3 per cent discount from the previous closing price. Yuexiu’s management explained that a rights issue to raise long-term funds will avoid “subjecting itself to interest burden or additional debt”.

“The rights issue will not only further strengthen the company’s capital base, but will also enable the company to seize more investment opportunities in the future, replenish its high-quality resources and achieve high-quality development,” said Lin Zhaoyuan, chairman of Yuexiu.

Bronze sculptures of bulls, the symbol of the Hong Kong Stock Exchange, look over Exchange Square in Central on June 20, 2020. Photo: Winson Wong
Bronze sculptures of bulls, the symbol of the Hong Kong Stock Exchange, look over Exchange Square in Central on June 20, 2020. Photo: Winson Wong
In a statement, Yuexiu said it is confident in the outlook for China’s property sector.

Trading in its shares and bonds was halted on Thursday morning. The company’s shares closed at HK$12.56 the day before, and slid 12 per cent following the afternoon announcement. Yuexiu also announced a dividend of HK$0.307 per share on Thursday.

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