Why is CIG ShangHai stock sliding today?
CIG ShangHai Co experienced a significant drop in its stock price on Thursday, declining nearly 5.0% to HK$108.6 per share. The company's announcement of a dual capital-raising plan caused investor concerns about the scale and pricing of the offering. CIG Shanghai entered into a placing agreement with six independent professional or institutional investors to issue 18,446,000 new H shares at HK$105.16 per share, representing an 8% discount to the previous session's closing price of HK$114.3.
This placing price equates to approximately 19.91% of existing H shares and 5.01% of the total issued shares, excluding treasury shares. The company also proposed issuing RMB3.96 billion in convertible bonds due in 2027, adding to potential future dilution and negatively impacting investor sentiment. Completion of the transaction depends on certain conditions being met.
Despite the Hong Kong and Mainland markets being relatively unresponsive, the Shanghai shares of CIG fell nearly 6% on Thursday.
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