Yangzijiang Shipbuilding plunges after share placement plan

China-based Yangzijiang Shipbuilding plans to raise net proceeds of S$208.8 million via placement of 137 million new shares.

Yangzijiang Shipbuilding
Yangzijiang Shipbuilding website

Shares in China-based Yangzijiang Shipbuilding fell as much as 7 percent after the company announced placement of up to 137 million shares at a discount to its last traded price.

The placement at S$1.53 a piece represented a discount of about 4 percent tothe volume weighted average price of S$1.5949 for trades done on August 29.

Shares in the company fell 7.4 percent to S$1.505 as at 0340 GMT on the Singapore Exchange. The stock has gained 85 percent so far this year.

Yangzijiang Shipbuilding aims to raise net proceeds of S$208.8 million via placement of shares.

The company intends to use half of the net proceeds to fund new investments and business expansion, with the remainder to be used for working capital and general corporate purposes, it said in a statement on Thursday.

Yangzijiang Shipbuilding, which makes ships and a wide range of commercial vessels, has appointed J.P. Morgan as the placement agent.

The bulk-shipping industry is in the midst of a recovery and scrapping of older vessels are creating demand for new ones, underpinning Yangzijiang.

Earlier this month, the company posted a 73 percent jump in second-quarter profit.