Sound Global (E6E.SG) off 7.8% at 6-session low of $0.71 in active trade as proposed sale of up to RMB885 million ($176.4 million) worth of convertible bonds fuels dilution concerns, says Dow Jones.

Amount of shares to be issued, assuming full conversion without upsize option exercised, represents 11.36% of existing share capital.

“Instead of going for an IPO in Hong Kong, they chose to sell bonds instead, which will do nothing to boost the stock's valuations. The market's not pleased at all,” says a trader at local brokerage.

Proceeds from 5-year bonds, which bear annual 6% interest, will be spent on build-operate-transfer projects in China, loan repayment, R&D, working capital. Move comes days after company revived HK dual listing proposal (shelved in June), but this time by way of introduction. Orderbook quotes suggest price may hold above $0.70 for time being.