Chinese sportswear brand Xtep International (1368) dropped more than 8 percent this morning after it announced plans to raise nearly HK$1 billion through a share placement and the issuance of convertible bonds.

The company proposed raising about HK$500 million through a placing of approximately 90.91 million existing shares at HK$5.5 each, a 9.4 percent discount to last Friday’s closing price of HK$6.07.

It also proposed to issue HK$500 million in 1.5 percent convertible bonds due in 2026, with an initial conversion price of HK$6.325 per share, representing a 4.2 percent premium over last Friday’s closing price.

Xtep intends to use the net proceeds to further develop the direct-to-consumer business model for its core brands and enhance branding initiatives and product offerings.

STAFF REPORTER