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HONG Kong-based property developer Pan Hong Property Group yesterday said that it has placed out 23.8 million new shares to a Chinese bank to raise net proceeds of $11.76 million.
The shares were placed out to Bocom International, the investment banking and securities arm of the Bank of Communications. The bank is partly owned by China's Ministry of Finance.
The new shares represent 4.86 per cent of the Pan Hong's existing issued and paid up share capital of 489.6 million ordinary shares (excluding treasury shares) as at yesterday. The shares were placed out at 50 cents each, which represents a discount of 13.58 per cent from the volume weighted average price at which Pan Hong's shares were traded from last Friday (which was the day prior to the signing of the agreement) up to the time the company's shares were halted from trading yesterday.
Pan Hong, which focuses on second and third-tier cities in China, intends to use the proceeds from the placement to fund its general working capital requirements, such as the construction of its property projects and/or acquisition of land for future development.
The group currently has plans to commence construction of four projects in Yichun, Huzhou, Fuzhou and Jiangmen cities during the current financial year ending March 31, 2010.
Pan Hong executive chairman Wong Lam Ping said that he was encouraged by the entry of Bocom International as a shareholder.
'As a renowned leading investment bank with a wide customer network in China and Hong Kong, Bocom International's investment is a vote of confidence in the group's business and prospects, and should have a positive influence on the group's reputation within the international investment community,' he said.
Pan Hong added that the net asset value (NAV) per share and the earnings per share (EPS) of the group will be 156.08 fen and 1.87 fen respectively after adjusting for the issue.
Based on the unaudited financial statements of the company for the first quarter ended June 30, 2009, the company's NAV per share and EPS were 152.32 fen and 2.09 fen respectively.
Pan Hong's stock rose two cents to a one-year high of 61 cents before trading was halted yesterday. The company's shares resume trading today.
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