Esprit rights shares offer over seven times oversubscribed

Esprit Holdings Ltd said it had received applications for 4.98 billion right shares, representing 7.7 times of the rights shares available for subscription, reported ‘China Daily’. Esprit Holdings Ltd. (330) climbed in Hong Kong trading in

the wake of the news, while benchmark Hang Seng Index dropped 0.2 percent.

As the company clarified Monday in a statement to the Hong Kong stock exchange, major shareholder Lone Pine Capital's stake in the company will be reduced to 10.88 percent from 14.15 percent after the completion of the rights issue while founder Michael Ying's stake will increase to 10.34 percent from 8.99 percent after issue.

Esprit earlier announced a plan to raise 5.2 billion Hong Kong dollars (671 million dollars) in a rights offer. The Hong Kong-based company received applications that represented 7.7 times the rights shares available for subscription, according to a Nov. 23 statement.

“The oversubscription is definitely positive for the stock,” said in declarations for Bloomberg Steven Leung, a Hong Kong-based institutional sales director at UOB Kay Hian Ltd.

A total of around 646.1 million shares were sold at 8 Hong Kong dollars each (1.03 dollars), and nearly topping the company’s hoped 677 million dollars. At that moment, Esprit advanced that funds raised from the new share issue will be used for "refurbishing existing stores", "developing the supply chain" and "fuelling future expansion plans”.

In the same vein, Esprit last week confirmed that former chairman Michael Ying has increased his stake to 10.34 percent from 8.99 percent.