Loan converted into road stake
Home electrical appliance maker Shell Electric Mfg (Holdings) has reached an agreement with mainland debtors to recoup a US$49.41 million loan.
The settlement marks the latest chapter of Shell's investment saga in a toll road since 1994, in which the company committed US$100 million.
The US$49.41 million loan was part of Shell's effort to realise its investment in the project following delays in construction and operations.
Shell said yesterday it had signed a settlement agreement with mainland debtors including Shunde City Highway Construction Corp and an investment arm of Shunde municipal government, which would transform the loan into a 52 per cent stake in the toll road.
Payment of the loan has been delayed since last November even though Shell realised US$49.5 million in the past few years.
The toll road generated a profit after tax of HK$5.84 million in the first 11 months of last year, against HK$3.25 million for the 12 months ending December 1998.