Sunac Drops on HK$2 Billion Share-Sale Plan: Hong Kong Mover
Sunac China Holdings Ltd. (1918), the developer part-owned by U.S. private-equity firm Bain Capital LLC, fell by the most in more than 10 months in Hong Kong trading after announcing plans to sell shares.
The shares declined 7.5 percent to HK$6.65 at the close of trading, the biggest drop since March 1 last year.
Sunac China is seeking to place 300 million shares at HK$6.7 each, the company said in a statement to Hong Kong stock exchange today. The developer will use the HK$2 billion ($258 million) proceeds for development and working capital, according to the statement.
“The placing price is set at the low end of the pricing range, which may send a negative signal to the market and could further test market depth,” Frank Miao a Hong Kong-based property analyst at Haitong International Securities Co. wrote in a note to clients today. He added that the share sale will have a “positive impact” on the company in the long run.
Sunac joins Chinese developers including Evergrande Real Estate Group Ltd. (3333) in raising funds as they seek financing for more projects amid a recovery in the property market. China’s Ministry of Land and Resources said last week it expected the country’s urban land prices to rise “moderately” this year. Shanghai sold the year’s most expensive plot for 5.4 billion yuan ($868 million) last month.
Evergrande plans to sell 1 billion shares at HK$4.35 each, the company said in a statement to Hong Kong stock exchange on Jan. 17. The developer will use the HK$4.35 billion raised to repay debt and for working capital, it said.
To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com