China State Shipbuilding Co. said it has completed a private offer of $1.6b worth of new shares to strategic investors to fund expansion.
The company sold 400 million new shares to eight investors including its state-owned parent at $3.99 a piece, less than one-eighth of its current share price, according to a filing to the Shanghai Stock Exchange.
The share placement was initially announced in January by Hudong Heavy Machinery Co, which in August changed its name to China State Shipbuilding. In January, its shares were quoted around $3.99. But the stock has since rocketed, becoming the most expensive on the mainland market, amid fund buying and an injection of assets by its parent. The company has said it will acquire more assets from its parent.
In yesterday's trading, China State Shipbuilding fell 0.38 percent to close at $33.10, coming off an intraday all-time high of $34.07.
From the private offer, China State Shipbuilding received $399.2m in cash and $1.2b in shipbuilding assets from its parent.
Other investors include top Chinese steel maker Baosteel Group Corp., China National Offshore Oil Corp., China Life Insurance (Group) Co. and state financial conglomerate CITIC Group. The new shares are subject to a 36-month locking period.
A 165 percent surge in first-half orders has helped China's shipbuilding industry overtake South Korea's as the world's largest in terms of deadweight tonnage.
[Source: Shanghai Daily]