HK Stock Market Move | Cig Shanghai (06166) turned positive after plunging more than 5%; the company placed shares at a discount and issued convertible bonds at a premium, raising over HK$6.5 billion net.

Cig Shanghai (06166) opened lower in morning trading, briefly plunging more than 5% before quickly turning positive. As of press time, it was up 0.79% at HK$115.2, with turnover of HK$252 million. On the news front, Cig Shanghai announced plans to place 18.446 million new H shares at HK$105.16 per share, a discount of about 8% to the October 7 closing price, with net proceeds from the placement of approximately RMB1.93 billion. The company also intends to concurrently issue convertible bonds with an initial conversion price of HK$128.82 per H share, a premium of 12.7% to the October 7 H-share closing price, with net proceeds from the bond issuance of HK$4.6055 billion. The announcement shows that the net proceeds from the share placement together with the concurrent proposed convertible bond issuance total approximately RMB6.535 billion, of which about 55% will be used to expand production capacity for optical module products; about 30% will be used for strategic investments in selected upstream enterprises; and the remaining approximately 15% will be used for general corporate purposes and to supplement working capital.