• Sun
  • Dec 28, 2014
  • Updated: 7:47pm

Price soars on debt rumour

PUBLISHED : Friday, 03 December, 1999, 12:00am
UPDATED : Friday, 03 December, 1999, 12:00am

Guangdong Investment yesterday saw its share price soar 18.62 per cent on rumours that an agreement on the US$5.59 billion debt-restructuring plan for the insolvent parent group was imminent.


The counter shot to an intra-day high of HK$1.32 before ending at HK$1.21 on relatively heavy turnover, with 50.18 million shares changing hands.


Guangdong Investment issued a statement saying it was not aware of any reasons for the surge in share price and trading volume.


It said there had not yet been an agreement reached on the debt-restructuring proposal.


Sources said the insolvent parent, Guangdong Enterprises (Holdings) (GDE), aimed to reach a consensus on the debt-restructuring package this month but added that it was difficult to tell whether this could be accomplished.


Progress had been made, albeit slowly, since GDE and its creditor banks resumed talks this autumn after several months of stalemate, they said.


The Guangdong provincial government has stopped helping GDE make interest payments since July 1, after creditor banks rejected the debt-restructuring proposal because of possible heavy losses.


A source said the resumption of interest payment was not impossible but would hinge on other issues under discussion in the overall package.


Sources said recent talks indicated that GDE's bank creditors would want to receive bonds issued from the Dongjiang Water supply company before it was to be injected into Guangdong Investment in a bid to increase their loan recovery rate.


RED CHIPS

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