HONG KONG (REUTERS) – Restaurant chain Haidilao International Holding plans to sell HK$2.35 billion (S$409 million) of new shares in a top-up placing, raising capital for repayment of credit facilities and to enhance supply chain management and product development.

The Chinese hot pot giant announced last week it will be shutting down or suspending the operations of around 300 poorly performing restaurants, after having expanded aggressively in the past two years.

The closures will reportedly affect outlets mainly in China, though some cuts will come in countries the restaurant has expanded into.

On Friday (Nov 12), in a filing to the Hong Kong bourse, Haidilao said it plans to sell 115 million new shares to major shareholder, SP NP, at HK$20.43 apiece, or at 7.97 per cent discount to Thursday’s close of HK$22.20 each.

The major shareholder will buy the new shares on completion of sales of the same amount of existing shares at the same price to third investors. Proceeds will also be used for working capital and general corporate purposes.

Shares of Haidilao have fallen 62.8 per cent this year as of the last close on Thursday.