By Shares of Chongqing Hongjiu Fruit experienced a significant drop in value early Monday following their announcement of plans to raise capital through a private placement.
Currently, the fruit company’s shares are down 11% at HK$3.85 ($0.49), having reached a low of HK$3.65 earlier in the day. Overall, the shares have seen a 27% decline since the beginning of this year.
According to an exchange filing, Chongqing Hongjiu Fruit revealed on Sunday that it has entered into an agreement to sell up to 189 million shares listed on the Hong Kong stock exchange at HK$4.35 each, equivalent to the closing price on January 19th.
With this capital raising venture, the company aims to secure approximately HK$800.6 million ($102.4 million) in net proceeds. These funds will contribute towards strengthening their fruit supply chain, repaying interest-bearing debt, replenishing working capital, and pursuing other general corporate objectives.
Chongqing Hongjiu Fruit reported a 26% increase in revenue for the first nine months of 2023, amounting to 13.43 billion yuan ($1.87 billion). The company is actively involved in the purchasing, importing, sorting, packaging, and wholesale distribution of fruits.
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