BOCHK will receive the lion's share of $1.44b under a liquidation proposal
A liquidation proposal by Shanghai Land Holdings, the Hong Kong-listed vehicle of imprisoned property tycoon Chau Ching-ngai, will release its $1.92 billion assets to shareholders, including BOC Hong Kong (Holdings).
Minority shareholders, who own 25 per cent of the firm, would receive $480 million in cash, or 62.9 cents per share, the company said.
BOCHK, the Hong Kong arm of state-owned Bank of China, will get $1.44 billion, which includes $644 million in cash, equivalent to 28.1 cents per share, and non-cash assets of $796 million, or 34.8 cents a share.
The non-core assets include three Shanghai hotel and real estate projects valued at $735 million and $61 million from various legal claims.
BOCHK controls a 75 per cent stake of Shanghai Land after jailed chairman Chau's New Nongkai Global Investments, which pledged all of its shares of Shanghai Land to the bank, failed to fully repay a $1.77 billion loan.
New Nongkai in 2002 borrowed the money from the bank to finance its takeover of Shanghai Land. According to a press release by BOCHK in June 2003, New Nongkai still owed the bank $741 million.