• Thu
  • Dec 25, 2014
  • Updated: 5:01pm

Lippo suspended on shake-up rumours

PUBLISHED : Saturday, 07 June, 1997, 12:00am
UPDATED : Saturday, 07 June, 1997, 12:00am
 

The stock exchange has suspended three Lippo group companies on rumours of a restructuring that would involve 'several listed mainland-backed companies' including China Resources (Holdings), sources said.


Parent company Lippo, property subsidiary Hongkong China and banking subsidiary HKCB Bank Holding Co, were suspended as the exchange sought additional information to explain recent sharp movements in their share prices.


Sources said Lippo would launch 'a complicated restructuring' that would see its parent company holding HKCB Bank through its property arm, Hongkong China.


Lippo now holds 58.8 per cent of HKCB Bank. HKCB Bank has a 50 per cent stake in Hongkong Chinese Bank, with the other half held by China Resources, the privately owned parent of red chip China Resources Enterprise.


'The significance is that China Resources' co-operation will increase,' the sources said.


It is understood this will be achieved through a share swap between Lippo and China Resources.


Co-operation between Hongkong China and China Resources (Holdings) began on May 29, when the Chinese company's vice-chairman and president Zhu Youlan joined the board of Hongkong China.


Sources said the restructuring was aimed at upping the value of Hongkong China, a property investor and developer 72.6 per cent owned by Lippo.


The sources said once Hongkong China had exposure to financial operations its value would increase.


The suspension followed a 42.5 per cent gain in Lippo's share price in the past month to $7.55.


The share price of HKCB Bank, which also operates merchant banking, securities, futures broking and insurance, has more than doubled to $6.90.


Hongkong China shares have risen 96.85 per cent to $6.25.


Lippo executives could not be reached for comment yesterday.


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