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Sum of $1.64 Billion raised by China Vanke
Sum of $1.64 Billion raised by China Vanke

On Thursday, China Vanke revealed its plans of investing up to CNY11.2 billion ($1.64 billion) via a secondary public offering of new shares.

In a statement, the country's largest property developer by market value specified that a sum of CNY9.2 billion would be utilized by it in the building of 14 real estate projects, while the remaining CNY2 billion will be spent on supplementing its working capital.

The company said that the new shares will total for no than 8% of China Vanke's share base prior to the public offering.

The shares of the company closed down 2.3% at CNY10.70, partly because of concerns that the market may have difficulty absorbing the new supply, as large initial public offerings are also lining up.

A source who didn’t want his name to be revealed said: “Analysts expect further downward pressure on China Vanke's share offering plan to be limited as the 8% dilution effect is smaller than an average of around 10% in recent share sales from other property developers.”

China Vanke, with the planned capital raising, will be able to accelerate its new construction and enlarge its land bank.