Galaxy plans private placement in HK
Print Edition
CHINA Galaxy Securities Co said it is planning a private placement in Hong Kong because it’s unlikely to list on the Chinese mainland in the near future.
In a filing to the Hong Kong stock exchange, the brokerage said it plans to issue up to 2 billion new shares, 54.2 percent of the enlarged H-share capital, through a private placement to no more than 10 investors as China Galaxy joins a fundraising frenzy in the country’s brokerage industry.
The issue price would not be lower than 80 percent of the average closing price of its H shares over five straight trading days prior to the price determination date, the filing said.
The additional share sale could help China Galaxy raise as much as HK$17.7 billion (US$2.3 billion) based on its closing price yesterday.
Shares of China Galaxy closed 0.2 percent up at HK$8.87 yesterday after falling 3.6 percent in earlier trading on fears the share sale would dilute the interests of existing shareholders.
Galaxy said it would use about 60 percent of the proceeds to fund margin trading, short selling and stock repurchasing even though China’s securities regulator has tightened oversight of such business to prevent undesirable market volatility.
Galaxy needs fresh capital to fund expansion as the brokerage said a planned dual-listing in Shanghai is unlikely in the first half of this year.
CITIC Securities said last month that it is planning to sell 1.5 billion new shares in Hong Kong via a private placement.
Haitong Securities also seeks US$3.9 billion from its share placement in Hong Kong.
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