BRIEF: Lancang Ancient Tea to raise $7.5 million via share placement at 16% discount

Tea producer Lancang Ancient Tea Co. Ltd. (6911.HK) announced on Sunday that it plans to place 24 million Hong Kong-listed shares, representing 16% of its enlarged issued share capital. It set the placement price at HK$2.46 per share, representing a 16.61% discount to last Friday’s closing price of HK$2.95, raising HK$59.04 million ($7.52 million).

The company said it would use the funds to support its business development, with estimated net proceeds of around HK$58.04 million earmarked for general working capital purposes.

Lancang Ancient Tea has faced multiple challenges since its IPO in late 2023. The company’s profit fell sharply in the first half of last year, and it replaced auditor PwC at year-end. Earlier this year, former general manager and executive director Wang Juan was dismissed due to disagreement over business philosophy. The company also failed to publish its annual results on time, leading to the suspension of its shares from April 1 to July 2.

According to its annual report released at the end of June, Lancang recorded a net loss of 308 million yuan ($43 million) in 2024, reversing a net profit of 80.08 million yuan the previous year.

Shares of Lancang Ancient Tea opened higher on Monday and closed up HK$3.13 by the midday break, up 6.10%.

By Lee Shih Ta

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