MicroPort Scientific Shares Fall 25% on Convertible Bond Plan

Dow Jones2023-12-06

By Sherry Qin

MicroPort Scientific shares fell sharply on new plans to raise US$220 million in convertible bonds to pay down debt, with investors balking at a move that could dilute shareholding in the coming years.

Shares of the Chinese medical-device company closed 25% lower Wednesday at 8.68 Hong Kong dollars (US$1.11), their largest one-day percentage drop since listing in 2010, according to FactSet data. The drop took year-to-date losses to 58%.

Affiliated companies Shanghai MicroPort MedBot and Microport Cardioflow Medtech fell 9.9% and 7.5%, respectively.

Shanghai-based MicroPort Scientific disclosed before the market opened that it will issue five-year convertible bonds to refinance offshore debt. The bonds, with a coupon rate of 5.75%, have an initial conversion price of HK$12.779, representing a 10.5% premium to shares' Tuesday closing price.

Converted shares would represent 7.3% of MicroPort's current share capital, assuming full conversion of the bonds and no further issue of shares.

The company also said it had entered a deal to repurchase about US$217 million of previously issued zero-coupon convertible bonds due 2026, leaving US$448 million outstanding. It said it could continue to buy back existing convertible bonds.

Analysts have been bullish on MicroPort Scientific despite the share slide this year.

Last month, Citi Research analysts had a buy rating and a HK$25 target price, citing the company's confidence in achieving 25% growth in annual revenue and positive signs in its surgical robot and orthopedics businesses.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

December 06, 2023 05:56 ET (10:56 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.

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