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CICC raises funds for business growth
Posted on Thursday, 17 October 2019 13:19
China International Capital Corporation (CICC) is raising HKD 2.53 billion (USD 323.05 million) to support expansion at home and abroad and fund additional investment in strategic business areas.

The Chinese investment bank said it would allot 176.00 million new H shares, representing a 4.0 per cent stake of the enlarged capital, to at least six professional, institutional and/or individual investors.

Its proposed price of HKD 14.40 apiece is a discount of 7.3 per cent to yesterday’s close, being the last unaffected trading day prior to the announcement of the equity dilution.

CICC noted the placing “represents an opportunity to raise capital to satisfy the needs for business development and implement the strategies of the company”, which may include pursuing mergers and acquisitions.

The Beijing-headquartered group said in its report for the first six months of 2019 that it intended to capture major business opportunities presented by macro and policy trends in H2 2019 to expand business scale and diversify sources of revenue.

It had no significant equity financing in the first half of 2019; the last time it raised funds was March 2018, when it issued 207.54 million H shares worth HKD 2.86 billion to Tencent Mobility.

CICC had assets under management of CNY 719.80 billion (USD 101.47 billion), as at 30th June 2019 (31st December 2018: CNY 662.03 billion).

The group had profit attributable to shareholders of CNY 1.88 billion in the six months ended 30th June 2019 (H1 2018: CNY 1.61 billion).

Zephyr, the M&A database published by Bureau van Dijk, shows 1,739 capital increases by Chinese companies have been announced so far this year.

The largest, at USD 5.97 billion, is the preference share issue of Bank of Beijing, which is followed by a USD 3.08 billion A share sale by Postal Savings Bank of China.

© Zephus Ltd