Chinese Estates to sell two properties to Joseph Lau
Chinese Estates will sell to beleaguered proprietor Joseph Lau Luen-hung two major properties in Hong Kong and Macau for up to HK$16.3 billion in a bid to remove uncertainties hanging over the company from its legal tussle with the Macau government.
As part of this deal, Lau will buy a wholly owned subsidiary of Chinese Estates that owns a commercial property at Silvercord, 30 Canton Road in Tsim Sha Tsui, and the La Scala luxury residential development in Macau. The Tsim Sha Tsui property will be sold for HK$10.5 billion and the La Scala development for HK$5.8 billion.
The asset disposal plan of the lucrative property comes five months after Lau was sentenced to prison for more than five years by a Macau court for his part in a bribes-for-land racket involving the most corrupt public official who was ever brought to justice in the history of the former Portuguese enclave.
In a filing with the Hong Kong stock exchange yesterday, Chinese Estates said the sale was aimed at ensuring the recovery of the construction and project costs incurred on La Scala. The project was suspended in 2012 after the Macau government named Lau in the corruption scandal. The billionaire lives in Hong Kong.
While no gain or loss has been recorded from the sale of Silvercord, Chinese Estates stands to make a windfall gain of HK$2.9 billion from the sale of the Macau project. The company said a special dividend will be declared.
Shares of Chinese Estates jumped 9.81 per cent to close at HK$21.95 yesterday on news of the deal.
"The sale will crystallise the value of the asset. In general, giving out special dividend will make everyone happy," said Alfred Lau, an analyst at Bocom International.
The developer said 94 per cent of the pre-sales agreements of 302 units at La Scala have been cancelled since Macau's Court of First Instance found in March that Lau and fellow developer Steven Lo Kit-sing offered a HK$20 million bribe to disgraced Macau public works chief Ao Man-long to secure the site.
Lau, who holds 74.99 per cent in Chinese Estates, resigned as chairman in March and passed on the baton to his son, Lau Ming-wai.
In its announcement, the company said its wholly owned subsidiary, Moon Ocean, has lodged an appeal to pursue claims against the Macau government for compensation for the losses incurred on the La Scala project.
On Monday, Chinese Estates and Sino Land secured the redevelopment project in Kwun Tong that will entail an estimated investment of more than HK$14 billion.
Chinese Estates has a 10 per cent stake in the project, with Sino Land holding the rest.