1368.HK
luckin makes consumer products

Athletic shoemaker Xtep International Holdings Ltd.  (1368.HK) announced on Monday it plans to raise HK$1 billion ($130 million) through a share placement, together with a convertible bond issue. It will use the funds to strengthen its direct-to-consumer business model and for brand promotion. Xtep’s shares dropped over 11% in early trading on Monday, but later pared the losses to close down 9.39% at HK$5.5 by the midday break.

The company said it will place 90.9 million shares at HK$5.50 per share, raising approximately HK$500 million. The placement price represents a 9.4% discount to the stock’s previous closing price, and the new shares will account for about 3.28% of the company’s enlarged issued share capital.

Additionally, Xtep plans to issue HK$500 million in convertible bonds maturing in 2026, with an annual interest rate of 1.5%. The initial conversion price is set at HK$6.325 per share, representing a 4.2% premium over the previous closing price. The bonds can be converted into up to 79 million new shares, representing 2.86% of the company’s enlarged share capital if the conversions are all exercised.

Xtep previously reported strong growth in the fourth quarter of last year, with its Xtep brand achieving high single-digit year-on-year growth in retail sales, while sales for its Saucony brand jumped around 50%.

By Lee Shih Ta

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