Shangri-La Asia Ltd., one of Asia’s biggest luxury-hotel operators, will raise as much as HK$5.23 billion ($674 million) in a 1-for-7 rights offer to pay bank loans and fund capital spending.

The company will sell as many as 471 million new shares at HK$11.10 each, according to a statement to the Hong Kong stock exchange yesterday. Shares in Shangri-La have fallen 27 percent this year. They closed at HK$11.10 on Oct. 22, their last day of trading before the suspension. Hong Kong-based Shangri-La applied for its shares to resume trading in the city today.

Shangri-La said it plans to use about HK$3.9 billion from the rights offer to pay bank loans to save on interest costs and will use the balance as working capital and to fund spending on existing hotels and new projects.

Revenue per available room growth — a measure of hotel profitability — in the Asia-Pacific region, where Shangri-La has most of its hotels, was intermittent in 2013 and 2014, Bloomberg Intelligence analysts led by Brian Miller wrote in a Sept. 22 report. Adverse currency exchange shifts in Japan, India and Australia and slowing economic growth in China dragged on the profitability of hotels in the region, according to the report.

China’s economy grew at its slowest pace in July-September period since the first quarter of 2009. The government has banned officials from spending money reserved for meetings on banquets or luxury accommodation, as the Communist Party battles public discontent over wasting of public funds.

To contact the reporter on this story: Bonnie Cao in New York at bcao4@bloomberg.net. To contact the editors responsible for this story: John Liu at jliu42@bloomberg.net. 

Photo Credit: Shangri-La Hotel, Qaryat Al Beri, Abu Dhabi. Shangri-La Hotels