China’s Huatai Securities to raise US$1.3 billion to fund overseas push
The issuance implies potential dilution for Hong Kong–listed shareholders, with the conversion price set at a premium
Leading Chinese broker Huatai Securities plans to raise up to HK$10 billion (US$1.3 billion) through the issuance of zero-coupon convertible bonds to support its international expansion, according to a Hong Kong stock exchange filing on Tuesday.
The company expects net proceeds of about HK$9.9 billion after commissions and expenses, with the funds earmarked for overseas business development and to bolster working capital.
The bonds will carry no interest and mature in February 2027. Investors will be able to convert them into Huatai’s Hong Kong-listed shares from the day after issuance.
The conversion price has been set at HK$19.70 per share, representing a 6.78 per cent premium to Monday’s closing price of HK$18.45 and a 5.09 per cent premium to the average closing price over the five trading days preceding the announcement.
Full conversion would create around 508 million new Hong Kong–listed shares, representing about 29.53 per cent of Huatai’s Hong Kong listing and 5.62 per cent of its total share capital across Hong Kong and Shanghai.
On an enlarged basis after conversion, these figures would fall to about 22.80 per cent and 5.32 per cent, respectively.
The bonds will be listed on the Vienna MTF, operated by the Vienna Stock Exchange – a common venue for bond listings – while the conversion shares will be listed on the Hong Kong stock exchange.