Chinese sporting goods business Li Ning plans to raise up to HK$1.69bn (US$218m) by way of an open offer in a bid to improve its cash position and support growth. 

The share issue, it said, will be used as working capital to support its next stage of growth and to optimise its capital structure.

"Next year will mark the beginning of the company's growth phase," said Li Ning, founder and executive chairman. "The series of adjustments made to date have resulted in an improvement in our operations and set the company on a clear path to growth.

Under the offer, qualifying shareholders will be offered a choice between ordinary shares and convertible securities, in the proportion of five offer shares for every 12 existing shares held. They will be offered at the subscription price of HK$2.60 each, representing a 25% discount to the company's closing share price on the last full trading day.

"The company has relentlessly adhered to its three strategic focuses, including focusing on the China market, Li Ning brand, and the five core sports categories with the highest growth potential in China - basketball, badminton, running, training and sports life," said Ning.

"New products were developed for our target market of ever-growing middle class sports consumers in the country, which includes both professional and mass market sports fans. These new products have achieved a unique competitiveness in our core market. In addition, benefiting from the Channel Revival Plan, the optimisation of our network has resulted in our various distributor and sub-distributor partners seeing improved profitability."

Shareholders including Viva China, TPG, GIC and Milestone Capital Strategic Holdings Limited, have committed to subscribe to the open offer.