Everbright sinks $425.8m into red

PUBLISHED : Thursday, 24 September, 1998, 12:00am
UPDATED : Thursday, 24 September, 1998, 12:00am

Red chip China Everbright yesterday announced a net loss of $425.87 million for the six months to June 30, helped by huge exceptional losses from its disastrous investments in retail operations in Hong Kong and Singapore as well as high interest costs for its expensive holding of a small China Telecom stake.

The loss of nearly half a billion dollars consisted of mainly provisions for its 19.93 per cent stake in local retailer Theme International Holdings and 44 per cent interest in the now defunct Emporium Group in Singapore, which amounted to $397.6 million.

The firm also incurred interest expenses of $46.13 million from its $1.1 billion loan used to buy a 1.5 per cent stake in China Telecom.

It said it was seeking to restructure the loan to reduce interest expenses in the near future.

The losses came although its banking and financial units contributed $129.327 million in pretax profits for the interim period.

For the past year, the red chip, headed by Zhu Xiaohua, formerly a deputy governor of the mainland central bank, has restructured its assets to focus upon the banking, insurance, and financial sectors.

For the six months under review, it derived pretax profits of $71.29 million from its 20 per cent controlled Everbright Bank of China, $39.87 million from its 20 per cent stake in the International Bank of Asia and $18.17 million from its 5 per cent interest in insurer National Mutual Asia.

It confirmed it was in talks to acquire assets in the financial sector but declined to elaborate.

For the interim period, the company's loss per share was 34.84 cents against earnings per share of 10.07 cents in the year-earlier period. No dividend was declared.