China Merchants Property Development Co has shelved a private placement plan worth up to 5 billion yuan (US$732 million) because of a fall in its share price, the company, one of the country's four largest publicly listed developers, said yesterday in a filing to the Shenzhen Stock Exchange.
The Shenzhen-based developer closed at 16.33 yuan yesterday. China Merchants said in August that it planned to raise as much as 5 billion yuan via a placement of as many as 200 million shares at not less than 28.12 yuan each to fund real estate investment in six projects countrywide.
Last month, the company modified its plan to raise up to 5 billion yuan by placing as many as 250 million shares, cutting its placement price to not less than 20.60 yuan each as property stocks started to plunge significantly amid tightening policies introduced by the central government to rein in speculation in the real estate market.
Many of its peers also faced a similar dilemma.
Since 2009, a total of 49 real estate developers have submitted additional placement plans to the securities regulator to raise as much as 100 billion yuan. However, by Wednesday, 32 of the companies had seen their share prices fall below their target placement price, China Securities Journal said yesterday, citing statistics from Shenyin and Wanguo Securities Co.
Shanghai Shimao Co, a real estate subsidiary under the Shimao Group, a conglomerate owned by billionaire Xu Rongmao, earlier said it planned to issue up to 150 million additional shares at not less than 13.81 yuan each but the company's shares closed at 10.56 yuan yesterday in Shanghai. Suning Universal Co, which is engaged in real estate investment, development, sale and leasing, ended at 8.49 yuan yesterday though its planned placement price had been set at not less than 13.40 yuan per share.
