By Scott Murdoch
-China’s JD Logistics priced new shares issued on Friday in a $1.1 billion capital increase at a steep discount to their previous close, triggering a slump in its stock early in the Kong Kong trading session.
According to a Hong Kong Stock Exchange filing, JD Logistics priced the shares at HK$20.71 each, a discount of about 10% to Thursday’s closing price, to raise HK$8.53 billion ($1.09 billion) on Friday. The stock fell by up to 11% on Friday in early trade to HK$20.35.
The deal consisted of a placement of about $700 million worth of shares to its parent company JD.com, and about $400 million in a primary share sale, according to filings on Thursday.
It was the first follow-on share sale in Hong Kong since Feb. 21, and the biggest since Sunac China carried out a $580 milllion top-up placement in early January.
It was also the third-largest follow-on deal in Asia and fifth globally this year, according to Refinitiv data.
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The share sale came despite ongoing volatility in regional equities markets, with Hong Kong’s Hang Seng Index down 6.5% this year.
The top 15 investors who bid during the bookbuild were allocated 80% of the stock that was on offer, according to a source with direct knowledge of the matter, who declined to be identified because he was not authorised to discuss the deal.
JD.com did not immediately respond to a request for comment on the deal’s composition.
JD Logistics said it would use the money raised to help fund potential acquisitions and build up its cash reserves.
($1 = 7.8232 Hong Kong dollars)
(Reporting by Scott Murdoch in Sydney and Indranil Sarkar in Bengaluru; Editing by Lincoln Feast and Kenneth Maxwell)