Earlier this month the Kong Kong-listed company posted a 26 percent fall in net profit to HK$9.15 billion for the financial year ended June 30, due in part to lower rental income from a key commercial property undergoing redevelopment.

In a statement the company said it expects to issue up to 2.172 billion shares on the basis of one rights share for every two existing shares, at a subscription price is HK$5.68 each, or 37 percent below Monday's closing price.

"The directors consider that taking into account the prevailing market conditions, it would be in the best interests of the company and the shareholders as a whole to raise long term equity funding for its general working capital," the statement said.

"Having considered other fund raising alternatives... the directors consider that the rights issue is the preferred means for the group to raise long-term funds without subjecting itself to interest burden or additional debt."

It said the proceeds of the issue would strengthen the company's capital base and enhance its "financial resilience".

In a separate statement, New World Development's mainland unit, New World China Land Ltd., also announced plans for a rights issue Tuesday to raise up to HK$4.35 billion.

Several large government land sales have fallen below market expectations this year, suggesting Hong Kong's red-hot real estate market is cooling.

Shares in major developers received a boost last week when the government announced the revival of a public housing scheme to increase supply of dwellings for low income earners who are being squeezed by soaring prices.