China Merchants Shekou plans preference share issue for capital boost

China Merchants Shekou Industrial Zone Holdings plans to issue up to 82 million preference shares, raising a maximum of 820 million yuan. The net proceeds, after deducting issuance expenses, will fund 11 "housing delivery, people's livelihood" real estate development projects across major cities, with total planned investment of 4.57 billion yuan. The issuance is expected to increase net assets by 2.94% and decrease the asset-liability ratio by 0.64 percentage points, while acknowledging potential dilution of immediate returns to ordinary shareholders.

The company has outlined measures to mitigate dilution, including strengthening operational management, enhancing internal controls, and adhering to a strict dividend policy. The preference shares will feature a fixed, cumulative dividend rate with a one-time adjustment mechanism and no conversion or put options. They will be offered to qualified investors via private placement, with no preferential allocation to existing ordinary shareholders.

This issuance aligns with national policies to stabilize the real estate market and the company's long-term strategic goals. The board of directors and senior management have pledged to tie their remuneration to the implementation of return-filling measures.