Wharf denies deal breaches agreement

PUBLISHED : Thursday, 22 April, 1999, 12:00am
UPDATED : Thursday, 22 April, 1999, 12:00am

Wharf Holdings has denied the US$575 million securitisation of income from its Harbour City complex breached agreements with creditors.

The property and infrastructure conglomerate described as 'inaccurate' reports that a number of creditors were considering taking action against the company over the February deal.

In a faxed statement yesterday, Wharf executive director John Hung rejected claims Wharf had breached the covenants of a $5.2 billion revolving loan facility.

The facility was completed in 1996 for subsidiary Pitney Investments and guaranteed by Wharf.

'Wharf has been notified [by the syndication banks] that the matter is now closed,' Mr Hung said.

A number of banks that participated in the loan syndicate had reportedly been upset that the securitisation of Harbour City, the shopping mall and office complex in Tsim Sha Tsui, undermined Wharf's balance sheet and its ability to act as guarantor for the Pitney loan.

One bank reportedly considered the securitisation constituted a breach of the terms of the Pitney loan.

Law firm Allen & Overy was appointed by the loan syndicate to advise on the matter.

It is believed the legal advisers presented their reply on Monday.

'Wharf advises that prior to the establishment of the new facility, as a standard procedure, legal opinion confirmed that there would be no breach of any corporate obligations,' Mr Hung said.

'The agents of the banking syndication have reconfirmed with the syndication's own lawyers - the very same legal firm that advised on the original Pitney loan - that there has been no breach.'