(Yicai) Oct. 17 -- Sunac China Holdings, one of the country’s biggest real estate developers, plunged after the firm said it plans to raise about HKD1.2 billion (USD154.4 million) via a discounted private placement of shares to fund its onshore debt restructuring and for general working capital.

Shares of Sunac [HKG: 1918] finished 27 percent lower at HKD2.24 (32 US dollars) each, just shy of the intraday low of HKD2.22, making it the third-biggest decliner on the Hong Kong Stock Exchange today. The stock is still up about 50 percent so far this year, compared with an 18 percent gain for the Hang Seng Index.

Sunac plans to issue as many as 489 million shares at HKD2.465 apiece, a discount of about 20 percent on yesterday’s closing price of HKD3.08, the Tianjin-based company said in a filing today. The new shares will account for about 5.3 percent of Sunac’s total equity after the issuance.

Sunac has already restructured part of its debt, but China’s struggling property market continues to dog its ability to generate cash flow through sales. The market has started to bottom out following a three-year adjustment, Housing Minister Ni Hong said at a press briefing today.

“Given the slower-than-expected market recovery, the group has extended the principal and interest payments on 10 domestic corporate bonds from the first half and third quarter to the end of this year,” Sunac noted, adding that it is seeking long-term solutions.

Sunac wrapped up its first onshore debt restructuring in January last year, which involved 10 bonds and supply chain asset-backed securities with a rollover period of 3.5 years worth a total of CNY16 billion (USD2.2 billion). In November, it completed restructuring USD9 billion of offshore debt by converting half to shares and issuing new stock for the remainder.

Despite this, Sunac still faces considerable debt repayment pressure, as the property market continues to bottom out and its sales decline. In the first three quarters of the year, contracted sales nearly halved to CNY36.5 billion from a year ago, with September’s alone plunging 85 percent to CNY1.4 billion (USD196.5 million).

Editor: Futura Costaglione