Chinese developer Kaisa plans to partly fund HK$2.7b property buy via rights issue

[HONG KONG] Chinese property developer Kaisa Group announced plans on Friday to raise up to HK$2.73 billion (S$474 million) through a discounted rights share issue to partially fund a US$2 billion acquisition of a real-estate project.

Shenzhen-based Kaisa had said a day earlier it will buy a mixed-use property development covering a total gross floor area of 201,601 square meters in Beijing for 13 billion yuan (S$2.7 billion).

Chinese developers have been scrambling to raise cash amid tighter liquidity, as authorities put stricter caps on how much new debt they can raise and limit bank loan exposure to the real estate sector.

Kaisa said in a securities filing on Friday it plans to issue one rights share at HK$2.95 for every seven existing shares, a 25 per cent discount to its closing price on Thursday.

The number of rights shares to be issued could total as much as 925 million, representing 12.5 per cent of the enlarged shares, it said.

Shares of Kaisa fell 14 per cent in early trading on Friday to HK$3.39.

Chairman Kwok Ying Shing and his affiliates, who currently hold a 39 per cent stake, will fully subscribe to the rights issue, according to the filing, and could, under some conditions, increase their stake to 40.5 per cent by subscribing to additional shares.

Kaisa also said on Thursday its 2020 net profit increased 18.6 per cent to 5.4 billion yuan.

REUTERS