Easyknit forced into sale for loss
Fashion retailer Easyknit International Holdings has been forced to sell property assets at a loss, as it seeks much-needed capital after an aborted rights issue.
The company has sold eight properties, including car parks and luxurious apartments, for $150.4 million to reduce debt in a deal that will incur a $158.1 million loss before expenses in the year ended March, 1999.
It was forced to sell the properties after minority shareholders thwarted a $300 million rights issue earlier this month.
The company said the properties, largely bought at the peak of the market last year, accounted for 13.3 per cent of the unaudited book value of its property portfolio of $2.32 billion on May 31, 1998.
It said it had outstanding debt before the sale of $1.07 billion.
It added that, despite the drop in rental earnings resulting from the sales, about $1.2 million in monthly interest expenses would be saved.
The company plans to cut debts further by selling more property, worth $150 million.
Easyknit finished yesterday one cent lower at 35 cents.