Chinese hotpot chain operator raises $ 302 million for debt repayment
Chinese company Haidilao International, which operates a chain of popular fondue restaurants, will raise HKD 2.35 billion ($ 301.6 million) by selling new shares in a follow-up placement to repay debt and for working capital requirements.
The company will also use 30% of the proceeds to improve its supply chain management and product development.
In one stock exchange deposit On Friday, the company announced plans to sell 115 million new shares to major shareholder SP NP Ltd at a price of HKD 20.43 a piece. The price is a 7.97% discount from Thursday’s closing price of HKD 22.20.
Stock prices fall
Following the announcement, Haidilao’s share price fell to a low of HKD 20.40 before recouping some of the losses to be 7.43% lower at HKD 20.55 at lunchtime Friday. Since the start of the year, the company’s share price has fallen nearly 68% as its business has been severely affected by the Covid-19 pandemic.
Earlier this month, the company closed or suspended the operations of 300 restaurants with relatively low customer traffic and “unsatisfactory operating results.” Some of these restaurants will be temporarily closed for up to two years.
In the first semester, Haidilao reported a loss of CNY 96.51 million (CNY 15.09 million) compared to a loss of CNY 964.51 million during the same period last year. Its revenue for the first half of 2021 more than doubled to CNY 20.1 billion from CNY 9.76 billion in the same period last year.
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