Tung Fong Hung to buy properties

PUBLISHED : Monday, 12 August, 1996, 12:00am
UPDATED : Monday, 12 August, 1996, 12:00am

Chinese medicine and property investment company Tung Fong Hung (Holdings) is to buy properties from its major shareholder Louis Lo Siu-fai for $106.6 million.

Tung Fong Hung said it entered into conditional agreement on Friday to buy the entire stake Mr Lo indirectly had in Global Step and Global Step's shareholder loan and director's loan for $9 million.

It also agreed to buy a 50 per cent stake in Wonder Joy Co, controlled by Mr Lo, which has properties in Mei Foo Sun Chuen in Kowloon with total floor area of 46,027 sq ft.

The purchase price represented a 5.4 per cent discount to the value of Wonder Joy after calculation of its property value, assets, and shareholder's and director's loan.

Tung Fong Hung had paid $26 million as deposit.

If the conditions for the purchase are not met before November 30, the agreement would fall through and the deposit plus interests returned to Tung Fong Hung.

The main asset of Global Step is a property in Kowloon with floor area of 1,800 sq ft.

That purchase price represented a 7.8 per cent discount to the value of the property after discounting its current assets, current liabilities and long-term liabilities.

Tung Fong Hung said the purchase would be funded by internal resources.

It said the properties would provide good returns and steady recurrent income for the company, adding that it might sell its interests in the two companies upon the completion of the deal.

The deal has to be passed in an extraordinary shareholder meeting.

Mr Lo holds 36.81 per cent interest of Tung Fong Hung and is the brother of director Lo Siu-wah.