iDreamSky Technology (HKG:1119) agreed to issue new shares through a mix of capitalization and subscription agreements, according to a Tuesday Hong Kong bourse filing.

Of the total, 166.4 million shares will be issued to PLR Worldwide Sales to offset $23.5 million in royalty fees owed by Shenzhen iDreamSky.

Another 69.8 million shares will be issued to investors, raising about HK$76.3 million in net proceeds.

The new shares represent about 11.6% of iDreamSky's enlarged issued share capital. The issue price represents a 4.6% premium to the last closing price of HK$1.05.

The company said net proceeds will mainly fund game promotion and operations, with the balance for general working capital.

Shares of the firm jumped nearly 6% in Tuesday morning trade.