Property investor surges on debt plan

PUBLISHED : Tuesday, 08 January, 2002, 12:00am
UPDATED : Tuesday, 08 January, 2002, 12:00am

Property investor Wah Tak Fung Holdings surged 16.67 per cent yesterday after announcing its long-awaited debt restructuring plan.

The counter hit 67 HK cents in early trade before closing at 63 HK cents, compared with 54 HK cents on December 12, its last trading day.

Wah Tak Fung was heavily traded, with HK$121.17 million worth of shares changing hands.

The stock had been suspended from trading since December 13 after the shares doubled within a month on rumours of the pending announcement of its debt-restructuring plan.

The loss-making property investor yesterday said chairman and controlling shareholder David Chu Yu-lin would take on HK$316 million in bank loans from the company in exchange for HK$283 million worth of preference shares.

Wah Tak Fung would also place new shares to another two creditors to cover unpaid debts of HK$14.53 million.

The company would also acquire the entire stake in property investment company Fine Straight Investment from a third party, Goldmile Pacific.

The acquisition would be satisfied by the issue of 7.22 per cent of Wah Tak Fung's enlarged share register.

Mr Chu's interest in the company would increase to 46.03 per cent after he fully converted the preference shares and the issuance of new shares under the debt-restructuring plan.

Mr Chu said the completion of the four-year debt restructuring would reduce Wah Tak Fung's debt level to about HK$200 million from a peak of HK$1.6 billion in 1998.

He said the debt restructuring was part of the company's plan to change to being a satellite operator from being a property investor. Last July, Wah Tak Fung paid a total of HK$156 million in cash and shares to acquire a 1.99 per cent stake in Hong Kong Satellite, a company controlled by Mr Chu and his wife.

Mr Chu said Wah Tak Fung planned to build a direct broadcasting satellite network in China and the region using at least 10 satellites, which might cost tens of billions in investment.