Esprit Raises $666.9 Million to Investors to Revive Brands

According to the WWD report, Esprit raised at least HKD 5.17 billion (US$ 666.9 million) by selling 646.1 million shares and hopes to revitalize the brand for brand reorganization. The sale is fully subscribed by HSBC and UBS.

The offer will be offered as one rights issue for every 2 existing shares. The rights issue shares are sold at a 80% discount of HK$8 (US$1.03) on Monday's closing price of HK$12.44 (US$1.61). Esprit said that the newly raised funds will be used to revive the brand, including redecorating the store, strengthening the supply chain and promoting expansion. The chairman of the company, Raymond Or Ching Fai, stated that the board of directors made this decision based on current economic uncertainty and business difficulties.

According to the news from Hexun from Hong Kong's Ming Pao News, Esprit Chief Financial Officer Deng Yongxuan stated in a conference call last night that this is the first time Acer’s rights issue and he hopes investors believe management’s decision. The funds raised by the rights issue are mainly used for marketing planning. The goal is to increase sales in a short period of time in order to increase the commercial value of Esprit and benefit investors. Deng Yongxuan also said that Eisen’s raising capital through a rights issue rather than other means is considering that compared to bank lending, rights issues provide more flexibility for company funds. In addition, the rights issue is more fair for all investors than the allotment, and it will not divide the interests of some shareholders.

Esprit still has more than 1,000 directly managed stores and over 10,000 sales outlets.