Why Hongqiao's $800m equity deal won't end its woes

The world’s largest aluminum producer raises $800 million in share placement as short seller attacks and rating downgrades undermine its ability to raise debt. It may yet need more.

Desperate times call for desperate measures.

For China Hongqiao Group that meant turning to the equity market with a HK$6.2 billion $800 million top-up placement to raise capital ahead of looming debt repayment deadlines in the months ahead. It may not be the last time it seeks support from equity investors.

Hongqiao is well known in the fixed-income market as a frequent issuer of debt, but has rarely raised public equity before. So it came as a shock when the company made a dramatic turn to the equity market on Monday with the biggest equity deal in Asia of the year so far.

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