CSI Properties plans to raise up to HK$2 billion

CSI Properties (0497) announced a strategic fundraising initiative to raise about HK$2 billion, through a underwritten rights issue and a senior unsecured notes.

The initiative is led by the controlling shareholder and Gaw Capital.

The company could raise funds through a HK$1.49 billion underwritten rights issue at a 5.88 percent premium to the closing price or by issuing HK$500 million in four-year senior unsecured notes with an interest rate of 8.22 percent per annum.

The developer said it will use HK$800 million to enhance its liquidity and financial stability, repay the group’s maturing indebtedness, and allocate the remaining balance for working capital.

Meanwhile, the company proposes a share consolidation, whereby every two existing shares will be consolidated into one share.

The company also proposes the bonus warrant issue, granting holders the right to subscribe for consolidated shares at an initial warrant subscription price of HK$0.22.

The developer suspended trading on January 23 and will resume tomorrow.