New World Development completes share placement
New World Development Company Limited ("NWD" or the "Group"; Hong Kong Stock Code: 0017), today announced the completion of a share placement raising HK$1.225 billion which will be used to reduce the Group's bank borrowings and result in a 4.33% reduction in consolidated net gearing to 63.36%.
This transaction underwritten by UBS Investment Bank was comprised of a placing of existing shares by NWD's major shareholder Chow Tai Fook Enterprises Limited ("CTF") and an issuance of new shares by NWD to CTF. CTF placed 250 million existing shares of NWD at HK$5.00 per share, a 7.41% discount to the closing market price of HK$5.40 on October 29, 2003 and will subscribe for 250 million new shares in NWD. The 250 million shares placed by CTF represented an 11.26% of the existing share capital. Upon completion of the placement and subscription of shares, CTF's holding in NWD will be reduced from 39.23% to 35.26%.
Commenting on the transaction, Dr. Henry Cheng Kar-Shun, Managing Director of NWD, said, "This share placement will strengthen the Group's balance sheet and capital base, reduce gearing and enhance the liquidity of NWD shares."