Lippo's main profit from $3b cash
Lippo said this year's profit would come mainly from the interest on its $3 billion in cash, as its major property-development projects had been shelved because of Hong Kong's uncertain investment outlook.
Managing director John Lee Luen-wai said most of the cash was deposited in local currency because of high interest rates.
'We have confidence in the Hong Kong dollar,' he said.
Lippo is the Hong Kong-listed flagship of the Indonesian-based Riady family.
The company's minority shareholders yesterday approved the sale by Lippo China Resources (LCR) - a listed enterprise effectively controlled by Lippo - of its 50 per cent equity position in Lippo CRE (Financial Services) to red chip China Resources Enterprise (CRE) for $1.17 billion.
Mr Lee said the proceeds of the transaction, combined with its $3 billion in cash, would effectively make the company debt-free. But he said Lippo had no plans to repay its outstanding debt of about $1.3 billion.
He said the company's total debt to total asset ratio was 17 per cent as at June.
Mr Lee also said LCR would not decide whether to make a provision for the company's 10 per cent position in Tung Chung Station's phase two development until December.
Lippo CRE, to be completely owned by CRE after the transaction, holds 60.4 per cent of HKCB Bank Holding, whose major asset is Hongkong Chinese Bank.
Lippo Securities is HKCB's broking arm.
