China Foods launches top-up placement

The Hong Kong-listed arm of the PRC''s trade agent Cofco has raised new funds for expansion.

A 20 million share placement was launched after Hong Kong's close yesterday (Thursday) via bookrunner BNP Paribas Peregrine and placing agent HSBC.

Final allocations will be completed today following a decision to diversify the potential investor base by bookbuilding through to the US. However, bankers report that demand is already strong for a red chip stock that has risen 22.81% year-to-date.

Shares are being offered at HK$1.975, representing a 5.9% discount to spot. Over a longer average, the stock has traded at HK$2.08 over five days, HK$2.04 over a 10 day average and HK$1.81 over a 30 day average.

As a result of the deal, Cofco will be diluted down from 50% to 46%, or 45.5% if a greenshoe is exercised. Raising proceeds of roughly HK$39 million ($5.07 million), the deal follows an earlier placement this year raising HK$11 million. This was designed to bring the company within the 25% freefloat requirements of the Hong Kong Stock Exchange.

During the 2000 Financial Year, the company reported a 66% rise in sales from HK$781 million ($100.38 million) to HK$1.30 billion. Net Income amounted to HK$90.4 million ($11.61 million).

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