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1. Ocean Park unveils Disney-style revamp

2. Government awaits MTRC plan

3. NWD in $4b rights issue

1. Ocean Park unveils Disney-style revamp
ELAINE WU, SCMP 13 February 2004

Ocean Park executives plan to tackle Disneyland by remodelling their park, building two hotels and upgrading shops and restaurants.

A portion of the park's facilities in its hilltop area will be shut during the construction period, expected to continue from 2006 to 2009. The improvements unveiled yesterday are being planned based on an assumption the government will build an MTR station at the theme park, on the proposed South Island line.

Ocean Park chairman Allan Zeman said an underground transport link to the park was important because rival Disneyland, which was scheduled to open in 2006, would have an MTR station on Lantau island. The changes also mirror Disney's game plan, which traditionally offers accommodation with its theme parks.

"We want to have some kind of proper transportation to Ocean Park," he said. "At the moment, for many people, it is easier to go to Shenzhen."

The park has hired Tom Mehrmann, 44, as its chief executive. He was recently a vice-president and general manager for Six Flags Marine World in the US.

The MTR Corporation has been studying the feasibility of a South Island line between Admiralty and Ap Lei Chau. Stations would include Ocean Park and Wong Chuk Hang.

The remodelling plans for Ocean Park call for a two- to three-star hotel at the MTR station and a five-star "boutique, spa-type" hotel to sit atop the hillside with a 360-degree view of sea and mountain, Mr Zeman said. Ocean Park will partner hoteliers to operate the hotels, but no potential company was named yesterday.

The park's hilltop area, where most of its amusement rides were located, would be shut during construction, which would tentatively start in 2006 after Disneyland opens, Mr Zeman said. The work is expected to be finished in 2009, when the MTR station is due to open. Details and costs will not be released until this year's third quarter. Ocean Park also has plans to upgrade its food and beverage outlets after contracts with its present operators, Maxim Group and McDonald's, expire in one year. The quality of the shops in the park would also be upgraded.

A government-led taskforce was formed in June 2002 to study the future of Ocean Park. Any redevelopment will require government funding.

Chan Yan-chong, director of the MBA programme at City University, said Ocean Park needs to draw on what Disneyland does not have. "It seems Ocean Park wants to be like Disney in the hope that people will spend their whole day at the park," he said. "But Ocean Park is less attractive because Disney is a more well-known brand."

He said building hotels would be a good proposition because the number of tourists coming to Hong Kong is expected to rise. Ocean Park, a non-profit organisation partly funded by the Jockey Club, reported a deficit for the financial year that ended last June, but it has since returned to the black largely because of an influx of mainland tourists. Executives were still considering raising the park's $180 entrance fee by "a few dollars", Mr Zeman said.

2. Government awaits MTRC plan
DENISE TSANG, SCMP 13 February 2004

The government expects to receive an MTR Corp (MTRC) proposal in the next three months on a rail extension between Yau Ma Tei and Hunghom that could be connected with a rival project, a senior official said.

Secretary for Environment, Transport and Works Sarah Liao Sau-tung said yesterday that a government decision to invite the MTRC to build the extension was aimed at reducing the loss of its passengers to Kowloon-Canton Railway Corp's (KCRC) Sha Tin to Central rail project. The proposed MTRC extension was originally part of its tender for the Sha Tin-Central rail project, which was awarded to KCRC in 2002.

Dr Liao said KCRC was finalising the alignment of the project, which included a controversial option of extending its East Rail - a cross-border line running between Hunghom and Sheung Shui - to Central.

This option is a subject of dispute, with the MTRC complaining that extending the East Rail across the Victoria Harbour contradicted tender requirements.

Dr Liao said the government would soon make public its decision on whether to merge the government-owned KCRC with the partly-privatised MTRC.

"Please be patient, a decision will be revealed very soon. We don't want to see the issue drag on for so long," she said.

It is understood that the government's decision will be made public next month when the administration delivers its annual budget.

3. NWD in $4b rights issue
Raymond Wang, The Standard 13 February 2004

Debt-laden New World Development (NWD) is expected to raise as much as HK$4.1 billion in a rights issue that is set to be the biggest among real estate developers in 17 years.

If it goes ahead as market sources suggest, the exercise would mean NWD has raised HK$5.35 billion in the past four months. The company netted HK$1.25 billion from a share placement in October. The cash would put the developer-turned-conglomerate in a strong position to take advantage of the current market upturn by buying land, paying government land premiums and reducing debt, industry sources said. The company has debts of about HK$31 billion.

Sources said NWD was planning to launch the issue on the basis of one rights share for every four existing shares at HK$6.70 per rights share. UBS Warburg is the underwriter.

This price would represent a 23 per cent discount to the closing price of HK$8.70, after the shares fell 4.92 per cent yesterday before trading was suspended in the afternoon.

NWD shares have risen more than 70 per cent over the past four months. But sources said late last night that since the underwriter and NWD could not reach an agreement on the exact terms of the rights issue, the stock will continue to be suspended this morning. The last developer to make a rights issue of such size was Cheung Kong (Holdings), which raised HK$10 billion in 1987. Hang Lung Properties raised HK$2.25 billion from a rights issue in 1992.

NWD director and general manager Stewart Leung refused yesterday to confirm or deny plans for a rights issue, but did rule out a share placement. There was also speculation that the company could hold a smaller rights issue on the basis of one rights share for every five existing shares, at HK$4.70 per rights share, to raise around HK$2.3 billion.

Analysts said NWD has made slow progress in cutting its debts in recent years. They said the company has never met its target to cut between HK$3 billion and HK$4 billion of debt each year. NWD has not disclosed debt-reduction figures.

BNP Paribas Peregrine's head of regional property, Adrian Ngan, said NWD has a gearing ratio of more than 40 per cent - or HK$40 debt for every HK$100 equity.

Market watchers said a rights issue - in which existing shareholders are offered the opportunity to buy additional shares, usually at a discount - would enable members of the Cheng family, including chairman Cheng Yu-tung, to increase their stakes relatively cheaply and enable them to dilute stakes held by smaller shareholders, who might be reluctant to pay for the new shares.

Through Chow Tai Fook, Cheng now owns 35.26 per cent of New World Development. Market capitalisation is HK$21.5 billion.

NWD has attracted attention in recent days because of its controversial purchase from the government of a building in Hung Hom that analysts say could see the company and its partner net an estimated profit of HK$800 million.