Kenneth Fang Hung, the prominent textile merchant and politician behind a rescue plan for Yeebo (International Holdings), is paying a hefty sum not just to save the troubled liquid crystal display (LCD) maker but also to save face.
Mr Fang, non-executive chairman of Yeebo, and Frankie Li, an executive director, are underwriting a rights issue that would cost them $155 million if no independent shareholder subscribed.
They have agreed to pay an initial $39.5 million in cash to bankers while the rest will be in loan assignments.
Not every cash-strapped company is fortunate enough to find a white knight on its doorstep. Yeebo is one of the lucky few.
The recapitalisation proposal, selected out of five proposals and accepted by the nine creditor banks, seems generous.
It involves no substantial write-offs on the part of the banks, Yeebo's debts will immediately be halved from $260 million to about $110 million and shareholders can choose whether their stakes are diluted.