November 5, 2018 / 2:53 AM / 10 months ago

Developer Guangzhou R&F proposes to issue up to 25 pct new shares

HONG KONG, Nov 5 (Reuters) - Chinese property developer Guangzhou R&F Properties proposed on Monday to issue up to 805 million new H shares, representing 25 percent of its existing total share capital.

On completion, the new issue would bring the total number of the company’s shares to up to 4.03 billion, with H shares accounting for 45.21 percent and domestic shares 54.79 percent.

Shares of R&F fell as much as 6.5 percent on Monday morning following the announcement.

The company will use the proceeds to repay debts, supplement its working capital and invest in projects, it said in a filing.

The new H share issue will provide the company with long-term capital and significantly recapitalize its capital structure with low-cost financing, the developer added.

“The company has not issued any form of equity since 2006. The current relative small H Share public float or highly geared capital structure cannot attract new strategic and long-term investors. The New H Shares Issue will resolve this issue,” the company said in a statement.

The company will hold a shareholders’ meeting on Dec. 21 to approve the new issue, the time and price of which are yet to be determined.

Reporting by Clare Jim; Editing by Sunil Nair

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