followons-from-suntech-power-and-sinoforest

Follow-ons from Suntech Power and Sino-Forest

Suntech raises $250 million, but the share price tumbles close to 15% during the offering, resulting in a 21% discount to the pre-deal close. Meanwhile, Sino-Forest raises $290 million from an upsized fixed-price deal.

Suntech Power Holdings late last week became the first US-listed Asian issuer to sell new shares through a placement this year, following the example of a series of US companies over the past month. The solar cell and module manufacturer raised $250 million, which it will use partly for repurchases and redemptions of existing securities, including a put obligation on its outstanding convertible bonds due 2012, and partly for capital expenditure and working capital.

While the offering found enough buyers, existing shareholders weren't overly enthusiastic about the dilution and pushed Suntech's share price 15% lower on Thursday, while the deal was in the market. This arguably made the execution a bit more challenging for...

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