Stationery-maker Climax International hopes to halve its 130 per cent gearing ratio by selling properties and conducting a rights issue. Climax chief executive officer Simon Hsu Nai-cheng said that after almost three months of negotiations, the firm reached an agreement on Tuesday with its 26 creditor banks to suspend repayment of about $600 million in outstanding debts until the end of September. Climax is 41.8 per cent controlled by the Fung family whose relationship with shareholder United Pacific Industries (UPI) - which holds 29.3 per cent of Climax - is believed to be tense. Mr Hsu, who is also managing director of UPI, said: 'We are co-operating with [Climax chairman Fung Kwong-yan] to rescue the company. The company's gearing is very, very high and it has had no fresh cash since January.' During the next three months, Climax hopes to sell a number of properties such as the Capital Building in Wan Chai, valued at $130 million, and might move out of its 200,000 square feet headquarters in Tai Po, he said. The company would also receive a much-needed $50 million cash facility from Standard Chartered Bank and raise about $100 million from a rights issue, he said. Climax's financial problems emerged last November when several bank creditors demanded immediate repayment. They worsened in March as the company failed to generate cash from property sales. 'The company was more troublesome than we expected. We find Climax's core business still viable, despite some mistakes made in the past,' Mr Hsu said. He attributed the mistakes to 'bad investments' by former Climax chairman Kenneth Fung Kin-yuen, who was forced to step down two months ago to make way for his father. Kenneth Fung spent almost $32 million on buying the remaining 49 per cent stake in an indirect subsidiary at a time when Climax's cash was already drying up.