Li Ning seeks more cash
China’s biggest sportswear brand Li Ning is planning to raise US$218 million to fund growth and restructuring.
The company plans a share issue ata price representing a 21.92 per cent discount on the previous trading close, a move which saw its share value decline in subsequent trading.
Li Ning is under relentless pressure from local rivals including ANTA Sports Products and international brands like Nike, adidas and Converse.
While the company said the cash injection would “support its next stage of growth and optimise its capital structure” some analysts see the move as more of a restructuring necessity than a growth mechanism.
“Next year will mark the beginning of the group’s growth phase,” founder and chairman Li Ning said in a statement.
He said the funds would help develop new products, boost competitiveness and “improve overall retail operational capability”.
Trading in Li Ning shares, was suspended on December 12 pending an announcement and resumed yesterday, Wednesday.