Pateo Connect to raise $75 million in third share sale this year

Smart cockpit and connected-vehicle solutions provider Pateo Connect Technology (Shanghai) Corp. (2889.HK) announced on Tuesday it plans to place up to 4.89 million new shares to raise about HK$578 million ($74.6 million), in its third such placement this year.

The shares will be sold for HK$120.28 apiece, representing a 14.39% discount to the previous day’s closing price of HK$140.50. They will be purchased by at least six independent investors and represent about 5.57% of the company’s enlarged issued H-share capital.

Pateo plans to use 40% of the net proceeds for strategic mergers, acquisitions and investments in areas including AI, optical communications, chips and semiconductors. The remaining 60% will be used for working capital, share repurchases, repayment of bank debt and general corporate purposes.

The company raised combined net proceeds of about HK$495 million through a share subscription in May and a placement in June. Only about 5.58 million yuan of those proceeds remained unused as of the latest announcement date.

Pateo’s revenue rose 105.1% year-on-year to 2.23 billion yuan ($332 million) in the first half of the year, while its net loss widened 35.1% to 307 million yuan. The company had cash and cash equivalents of 1.54 billion yuan at the end of June.

Shares of Pateo Connect opened lower on Tuesday and closed at HK$114.5 by the midday break, down 18.51%. The stock has fallen about 47.6% year-to-date.

By Lee Shih Ta

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