Mansion Holdings says it is experiencing liquidity problems and will have difficulty servicing hundreds of millions of dollars in bank borrowings.
It said it had unaudited utilised bank loans and trade facilities amounting to $513 million as of December 15. Its unaudited cash balances at that date were $26 million.
Trust receipt loans and other bank loan repayments of $249.5 million had become overdue as of January 20. A further $110.5 million would become overdue within three months.
This compared with the company's audited consolidated net tangible assets as at December 1996 of $291.7 million.
Mansion said it was discussing a restructuring with bankers and had appointed Coopers & Lybrand as independent reporting accountants to evaluate its financial position and future cash flow projections. A report was due by the end of January or early February.
The company said a mainland enterprise, China Success International Investment (Group), had agreed to subscribe for a $13.96 million secured note. The note was convertible into 87.28 million new shares, representing about 14.8 per cent of the company's enlarged issued share capital.
