China’s Geely raises $836 million from share sale

FILE PHOTO: A building of the Geely Auto Research Institute is seen in Ningbo, Zhejiang province, China August 4, 2017. REUTERS/Aly Song

HONG KONG/BEIJING (Reuters) – Geely Automobile Holdings Ltd (0175.HK) said on Friday it raised HK$6.48 billion (676.84 million pounds) from a share placement as the Chinese automaker looks to replenish its coffers to finance growth in the world’s largest auto market.

Hong Kong-based Geely has sold 600 million primary shares at the bottom of the HK$10.80-HK$11.20 ($1.39-$1.44) price range, or at a 7.85% discount to the last closing price of HK$11.72, according to its release.

The offering represents about 6.1% of its enlarged share capital, and the company plans to use the proceeds to support its business development and general growth.

Its share placement comes after China’s economy suffered a 6.8% contraction in the first quarter, as the country reeled from an epidemic that started in the central city of Wuhan.

Geely Automobile, based in the eastern province of Zhejiang, is China’s most globally high-profile automaker following investments by parent company Zhejiang Geely Holding Group Co Ltd’s [GEELY.UL] in European manufacturers Volvo Car and Daimler AG. (DAIGn.DE)

Geely Automobile and Volvo – which Geely’s parent bought from Ford Motor Co (F.N) in 2010 – are planning to merge and list in Hong Kong and possibly Stockholm.

Geely’s stock dropped nearly 10% to HK$10.6 on Friday.

Bank of America, Goldman Sachs, HSBC, Morgan Stanley and UBS were the bookrunners for the transaction.

Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing, Editing by Sherry Jacob-Phillips

Source Article