China’s Li Ning risks running too far off trail

Viva Goods

29/10/2021 05:09

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Yawen Chen
    HONG KONG, Oct 29 (Reuters Breakingviews) - The $28 bln
sportswear maker is raising $1.3 bln to capitalise on a stock
rally partly fuelled by nationalistic Gen Zers. International
expansion and brand-building are among the targeted uses for the
money. It might get more bang for the buck by beefing up a small
R&D budget.
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    CONTEXT NEWS
    - Chinese sportswear maker Li Ning said on Oct. 28 that it's
planning to sell HK$10.5 billion ($1.3 billion) of new shares to
raise capital for international expansion, brand building and
other reasons.
    - It intends to sell 120 million new shares, or about 4.6%
of the enlarged share base, to existing shareholder Viva China
at HK$87.50 apiece, or about an 8.1% discount to the closing
price on Oct. 27.
    - Viva will buy its shares after the same amount is sold at
the same price to other investors, Li Ning said.    
    - Li Ning shares closed down 8.2% at HK$87.40 on Oct. 28.

 (Editing by Jeffrey Goldfarb and Katrina Hamlin)
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