China Hongqiao Group, the largest private aluminium producer in China, plans to raise HK$11.68 billion through a share sale to fund projects and pay off debt. The company aims to take advantage of strong industry margins and the vibrant Hong Kong equity market.

The company intends to sell up to 400 million existing shares at a price of HK$29.20 each, which is a 9.6% discount to Monday’s closing price. This move will increase China Hongqiao’s enlarged share capital by about 4%.

Aluminium is currently trading near a three-year high due to solid demand and controlled supply. The offering price represents a premium of nearly 2.2% to the average closing price over the past 30 trading days.

The fundraising comes at a time of rising margins for aluminium, with Citigroup analyst Jack Shang noting that the sector is expected to benefit from tight supply and strong demand.

China Hongqiao is among the companies turning to the aluminium industry in Indonesia, along with Shandong Nanshan Aluminium and Tsingshan Holding Group. This follows a trend of multibillion-dollar projects in Southeast Asia’s largest economy.

The company recently raised US$300 million through convertible bonds in Hong Kong to refinance offshore debt. Fundraising activities in Hong Kong, including IPOs and share placements, have nearly tripled compared to the previous year.

Significant deals in the market include BYD’s US$5.6 billion share placement and Xiaomi’s US$5.5 billion share placement. Alibaba Group Holding also raised about US$3.2 billion through convertible bonds in Hong Kong earlier this year.

Read more at Yahoo Finance: China Hongqiao targets US$1.5 billion from share sale in Hong Kong amid aluminium boom