(Yicai) June 3 -- Shares in Haichang Ocean Park Holdings plummeted today after the struggling Chinese theme park operator said it plans to issue heavily discounted new shares to bring cultural tourism investment firm Sunriver Holding Group on board as its largest shareholder.

Haichang’s share price [HKG:2255] plunged 13.1 percent to close at HKD0.73 (USD0.09), giving it a market capitalization of HKD5.9 billion (USD752 million).

Haichang plans to issue 5.1 billion new shares to Sunriver at a price of HKD0.45 (USD0.06) each, a 38 percent discount on its closing price today, the Shanghai-based firm said yesterday.

After the deal is closed, Sunriver will own 38.6 percent of Haichang’s enlarged share capital. This will dilute the stake held by founder Qu Naijie and his family-controlled Zeqiao Holdings to 29 percent from 47.3 percent. Qu, who is also chairman and president of the company, will remain the second-largest stakeholder.

Haichang expects to raise HKD2.3 billion (USD293.2 million) after costs which it will use to develop its core businesses, such as park operations and intellectual property development, repay existing debts and cover daily expenses, the firm said.

Haichang has had a difficult time since the Covid-19 pandemic. In 2020, it hemorrhaged CNY1.5 billion (USD208.4 million) but briefly returned to profit in 2021 before falling back into consecutive losses of CNY1.4 billion in 2022, CNY197 million (USD27.3 million) in 2023, and CNY740 million in 2024.

As of the end of last year, Haichang operated seven theme parks across six Chinese cities, including Shanghai and Dalian, while working on new projects in Beijing and Fuzhou. The company reported revenue of CNY1.8 billion (USD250.1 million) last year, about the same as the year before.

Founded in 1992, Sunriver started out in real estate and construction before expanding into culture and tourism investments. It owns two subsidiaries that are listed in mainland China, namely Zhejiang Sunriver Culture Tourism and Anhui Gourgen Traffic Construction.

Editor: Kim Taylor