Tycoon Carson Yeung Ka-sing came to the rescue of the troubled Sing Pao Daily News yesterday, extending to its parent company an interest-free loan of up to HK$60 million.
Mr Yeung's wholly-owned Billion Wealth entered into a loan agreement with Hong Kong-listed SMI Publishing, which owns the newspaper, on Wednesday, a filing to the stock exchange shows.
Under the agreement, the loan is interest free and can be used only for general working capital, acquisitions, loan repayments and internal restructuring by SMI Publishing and its subsidiaries. SMI Publishing has to repay the loan in two years.
Mr Yeung is chairman of Grandtop International Holdings, which last year became the largest single shareholder in the Birmingham City football club.
Strategic Media International, a substantial shareholder of SMI Publishing, used its SMI Publishing shares as collateral for the loan. It also assigned to Billion Wealth as security all rights in a loan of about HK$91 million owed by SMI Publishing to Strategic Media.
Strategic Media also assigned to Billion Wealth all its rights in a convertible note issued by SMI Publishing worth about HK$49 million, which can be converted into about 980 million shares of SMI Publishing.
Sing Pao Daily News this month narrowly averted court action to close it down after management settled outstanding Mandatory Provident Fund payments 90 minutes before a deadline set by the fund's watchdog. The company had been warned by the MPF Schemes Authority it would face a winding-up petition if it did not clear defaulted payments of HK$4.2 million.