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CR Cement in placing and top-up subscription
Posted on Tuesday, 12 June 2018 08:19
China Resources (CR) is injecting HKD 4.19 billion (USD 533.34 million) into China Resources Cement (CR Cement) to support growth and the repayment of debt. Zephyr, the M&A database published by Bureau van Dijk, shows this capital increase is one of the cement sector’s top 40 by value on record, ahead of an equity dilution by Fletcher Building that completed in May 2018. It will also be among the ten largest cash calls announced by a company listed in Hong Kong so far this calendar year. Under the agreement, CR, via an offshore vehicle, will first sell 450.00 million existing shares, representing a 6.9 per cent pre-top-subscription stake, to no less than six independent investors. At HKD 9.30 apiece, the placement represents a discount of 9.9 per cent to the last unaffected closing price. In effect, CR is then using proceeds to buy 450.00 million newly issued shares on the same terms as the sale agreement. Following both deals, the state-owned enterprise will remain as a majority shareholder, though its current 73.5 per cent participation will be ultimately diluted to 68.7 per cent. CR Cement is using proceeds from the cash call to develop its prefabricated construction and aggregate businesses, repay debts and bankroll general day-to-day business activities. The capital increase comes a day after the group released a profit alert indicating net profit attributable to owners in the six months to 30th June 2018 is expected to be significantly up on H1 2017. CR Cement noted the increase is mainly due to higher selling prices of cement products in the first half of 2018. © Zephus Ltd