Zhixin Group (HKG:2187) agreed to issue 149.6 million new shares at HK$0.68 apiece under its general mandate, raising net proceeds of about HK$101.4 million, according to a Monday Hong Kong bourse filing.

Shares of the building materials provider were up nearly 8% in Tuesday morning trade.

The subscription shares represent 20% of the company's issued share capital and about 16.7% of its enlarged share capital following completion.

The subscription price represents a 15% discount to the stock's last close and an 18.5% discount to the five-day average price, the filing showed.

The shares will be subscribed by two investors under separate agreements.

Century Noble International, wholly owned by company secretary Yuen Chi Wai, will subscribe for 67.3 million shares, while Pakhim Chen Capital will subscribe for 82.3 million shares.

Zhixin said net proceeds will be used mainly for the construction of a production line for iron ore tailings, with the balance allocated to general working capital.