China Overseas puts provision for project in Stanley on hold
Red-chip China Overseas Land & Investment has put on hold any decision on whether to make a further provision on a jointly owned property project in Stanley.
After the company's annual general meeting, chairman Sun Wenjie said the decision on a possible provision was up to its major shareholder - financially troubled Paliburg Holdings.
It would also depend on the condition of property market, which he said was improving.
Mr Sun said the project in Stanley would proceed smoothly in view of Paliburg's improving financial situation although it was not expected to be sold this year.
China Overseas in April announced a $1.52 billion provision for its interests in properties under development for last financial year.
They were reported to include a 30 per cent stake in a luxury project in Stanley and its 60 per cent stake in a Tuen Mun residential site.
The huge property provision led the company to post its first full-year loss - $482.07 million - since listing in 1992.
Mr Sun said China Overseas planned to dispose of five projects this year including Nerine Core in Tuen Mun and Ellery Terrace in Ho Man Tin.
Another three are in the mainland - in Shenzhen, Guangzhou and Beijing.
The company was expected to generate property sale revenues of over $7 billion assuming all the units were sold, he said.
Mr Sun said the group's financial position had improved after the company had made a big effort to reduce debt. Last year, China Overseas repaid creditors $3.9 billion. Mr Sun said all loans due to mature this year were also repaid.
China Overseas has about $600 million in cash and $2.6 billion in committed bank facilities.
He said the company was also keen to make acquisitions but the upcoming government auction of two sites would not be targeted.
The Government will sell two residential sites - one on the Peak and one in Kwai Chung - on June 29.
In the construction sector, Mr Sun said China Overseas in the first five months won additional 25 contracts worth $6.2 billion.