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Chinese hotpot chain operator to raise $302m for debt repayment

04:54, 12 November 2021

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A Haidilao outlet in Bangkok
A Haidilao outlet in Bangkok - Photo: Shutterstock

China’s Haidilao International, which operates a chain of popular hotpot restaurants, will raise HKD2.35bn ($301.6m) through selling new stocks in a top-up placing to repay its debt and for working capital needs.

The company will also use 30% of the proceeds to enhance its supply chain management and product development.

In a stock exchange filing on Friday, the company said it plans to sell 115 million new stocks to major stockholder SP NP Ltd at the price of HKD20.43 a piece. The price is a 7.97% discount on its Thursday’s closing price of HKD22.20.

Stock price falls

Following the announcement, Haidilao’s stock price fell to a low of HKD20.40 before recovering some of the losses to be 7.43% lower at HKD20.55 at lunch time on Friday. Year to date, the company’s stock price has fallen nearly 68% as its business has been severely affected by the Covid-19 pandemic.

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Earlier this month, the company shut down or suspended the operations of 300 restaurants with relatively low customer traffic and “unsatisfying results of operations”. Some of these restaurants will be temporarily closed for no more than two years.

In the first half of the year, Haidilao reported a loss of CNY96.51m ($15.09m) as compared with a loss of CNY964.51m in the same period last year. Its revenue for the first half of 2021 more than doubled to CNY20.1bn as compared with CNY9.76bn in the same period last year.

Read more: China’s growth outlook clouds yuan’s prospects

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