TROUBLES at YGM International, controlled by the family of Mr Chan Sui-kau, belie strong performances and expansion plans for stable mates YGM Trading and Yangtzekiang Garment Manufacturing Co.
News that YGM's Ohio-based women's fashion retail chain, Madison's of Columbus, had filed for Chapter 11 protection from creditors dragged the low-profile group built by Mr Chan and now managed by his four sons into the limelight in June last year.
At the time YGM said a cash-raising exercise was a considered option for rescuing the debt-laden chain which it bought for $42.9 million in 1990 as the planned first stage in setting up a larger US network selling YGM-made brand name clothes.
It was a surprise announcement that sent its already subdued share price skidding by about 25 per cent to settle at around 26.5 cents. It languished there for five months until rumours of a takeover offer by a third party, possibly a China concern seeking a back-door Hongkong listing, fuelled a spectacular rise to 92 cents on December 16.
Trading in YGM (spun off from Yangtzekiang and listed in 1988) was suspended from December 17 until January 11, when it announced a reorganisation and the intention of new owner Wedlake to take a slimmed down group off the Chans' hands.
''We feel it's a deal that's good for minority shareholders,'' said Mr Samuel Chan Wing-sun, deputy managing director of YGM, of a transaction where a Chan family vehicle known as Sevenoaks will shoulder the company's US$8 million outstanding debts andkeep YGM's operations in Malaysia and Singapore and investments in other parts of the family group.