Yuexiu Property Shares Sink on $1 Billion Rights-Issue Plan

Chinese developer Yuexiu Property Company Ltd. shares tumbled after the company said it plans to raise HK$8.36 billion ($1.1 billion) in a rights issue.

(Bloomberg) — Chinese developer Yuexiu Property Company Ltd. shares tumbled after the company said it plans to raise HK$8.36 billion ($1.1 billion) in a rights issue.

The Guangzhou-based builder proposed to issue 929 million rights shares at HK$9 apiece on the basis of 30 for every 100 existing shares, according to a statement to Hong Kong stock exchange. The shares sank as much as 18% to HK$10.28, the biggest drop since 2001.

Proceeds will used to invest in core cities in the Greater Bay Area, eastern China and other key provincial capital cities, as well as for working capital, according to the filing. The rights shares will represent about 23% of enlarged issued share capital, the firm said.

The rights issue comes after the company’s shares surged to a decade-high last week. The company is controlled by a state-owned assets supervisor in Guangzhou.

(Updates with company background in the fourth paragraph)

More stories like this are available on bloomberg.com