Trading in the shares of the SCMP Group, which publishes the South China Morning Post, may be suspended if its publicly held shares fall below the requisite 25 per cent by February 27, the company said in a filing to the stock exchange yesterday.
The public float would fall below 25 per cent of the issued share capital if three banks that were granted options in 2009 decide to exercise the option of selling 225 million shares - or 14.4 per cent - of SCMP shares back to the company's substantial shareholder, Kerry Media.
Kerry granted the options to JP Morgan Securities, Deutsche Bank and Bank of East Asia on February 27, 2009, the same day it sold them the shares.
Kerry had sold the shares, at HK$1.70 each, to increase the public holding of the stock to 25 per cent.
If the options are exercised in full, the company's shares held by the public would drop to 10.6 per cent.
According to the listing rules, a company must suspend trading if the public float falls below 25 per cent of its issued share capital.
SCMP said its directors had been liaising with Kerry regarding the status of the options.
The agreed price under the option was HK$1.70 per share plus a financing charge of 1.1 per cent a year and net dividends, which would translate into a total transaction of about HK$400 million if the banks exercise the option.
SCMP shares closed unchanged at HK$1.65 yesterday.