Country Garden shares suffer 15% hit on $360mn share sale discount
Shares in one of China’s biggest property groups, Country Garden, fell 15 per cent after the company announced a heavily discounted $360mn capital raise, in the latest sign of liquidity problems hitting the country’s real estate sector.
The Hong Kong-listed developer said it would price the new shares at HK$3.25 each, nearly 13 per cent below Tuesday’s closing price. The share price decline wiped about HK$13bn ($1.7bn) from the group’s market capitalisation in morning trading.
Country Garden has not defaulted on its debt and its leverage is lower than that of other Chinese developers grappling with high levels of leverage, analysts noted. But despite the Guangdong-based group saying it would use the funds to pay back debt, the discounted share placement spooked investors.