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Appeal for information on theft from construction site
case 2.
Lai Sun unveils fresh debt recipe
1. Appeal for information on theft from construction site case
Hong
Kong Government, 27 January 2003 Police
are appealing for information on a theft case in which two mechanical excavators
were stolen from a construction site in Lantau Island in December 2002. Two
mechanical excavators of a construction site on North Lantau Highway in Lantau
Island were found missing on December 1 and 2, 2002. The
total value of the stolen property is about $1.1 million. The
case is now being investigated by officers of the Divisional Investigation Team,
Lantau North. Anyone
who might have witnessed any suspicious activities in the area or has information
to offer is urged to contact the investigating officers on 2988 2442.
2. Lai Sun unveils fresh debt recipe
KENNETH
KO, SCMP 27 January 2003 Lai
Sun Development's impending debt restructuring will be more comprehensive than
past efforts aimed at putting the company on solid ground, according to director
Keith Wu Shiu-kee. With
debts of about HK$7.8 billion, the property company is in talks with creditors
to restructure or reschedule its obligations. Mr
Wu said he was confident that ongoing discussions with bondholders and associate
eSun Holdings would bear fruit in the first quarter of the year. Lai Sun's exposure,
through convertible and exchangeable bonds, is about HK$1.7 billion, while it
owes eSun HK$1.5 billion. Both
fell due at the end of last month, but were extended for three months pending
a resolution to restructuring talks. Mr
Wu said the firm was considering cash repayment, the issuance of new bonds and
a debt-for-equity swap. "It's
like a recipe. The question is the mix of ingredients," he said. Speculation
of a debt-for-equity swap has it that Lai Sun may issue a substantial amount of
new shares to bondholders and eSun to cut debt. Mr
Wu did not rule out such a move, saying the restructuring talks were productive.
"The objective
is that, subsequent to the restructuring, Lai Sun's cash flow can cover interest
and operating obligations," he said. Lai
Sun's financial troubles stem from the purchase of the former Furama Hotel group
at the height of the pre-handover bubble in 1997 at a cost of nearly HK$7 billion.
The company recorded
a loss of HK$1.94 billion for the year to July 31, compared with the previous
year's HK$1.19 billion. Mr
Wu said the company's last debt-restructuring deal was reached in 2000 on the
assumption of a stable property market. However, a further slide in prices disrupted
the plan. He
said, for cash flow, it had managed to sell a number of assets, including Carnarvon
Plaza in Tsim Sha Tsui, a majority stake in the former Furama Hotel and Crocodile
House in Central, since 1998. Mr
Wu said Lai Sun wanted to create more equity surplus from asset sales, but the
property market weakness was not conducive for disposals at reasonable prices.
Lai Sun had recently
offered the Majestic Hotel in Jordon for sale by tender, but the offers received
did not meet the target price of HK$700 to million 800 million it was looking
for, he said. Mr
Wu said the company would rather hold the property than sell at a fire-sale price.
This would provide
more room to arrange asset disposals without pressure from creditors and allow
the company to focus again on core business growth, he said. With
an estimated net asset value of HK$766 million, Lai Sun's debt-to-equity ratio
stands at about 10. Mr
Wu said the company was aiming to cut the debt and bring the gearing ratio down
to lower levels. He said it was a tough process to strike a deal with creditors,
but he was optimistic about the outcome. He
predicted that the gloomy office market might see a further correction in the
first half of the year before stabilising. Lai
Sun has two small-scale planned developments, including a residential project
in Yuen Long and a serviced apartment project in Tsim Sha Tsui. | 
