A PROVISIONAL liquidator has been appointed to Swilynn (Hongkong), a subsidiary of Swilynn International Holdings. Mr John Lees of certified public accountant Ferrier Hodgson & Marfan was yesterday appointed provisional liquidator to Swilynn (Hongkong), the group's major operating arm. Swilynn chairman Ngan Ping-woon said one of its bank creditors had applied through the Supreme Court for the appointment, pending the outcome of negotiations with a prospective buyer of the group's debts. Swilynn's only remaining trading operations are Swilynn (Hongkong), Swilynn Malaysia, Hongkong Video Publishing Co and Colorland Animation. One of the preconditions for the deal would be the putting in place of a scheme of arrangement acceptable to both shareholders and unsecured creditors. Analysts said they were not surprised to see a provisional liquidator being appointed to the company, as it was unable to settle its heavy debt burden. Swilynn, a victim of its own over-expansion, had struggled to relieve its debt burden by disposing of assets, including the recent sale of a 34.42 per cent stake in Teletech International Holdings to Grande Holdings. But its debt exposure was too much for the group to settle. Mr Lees said Swilynn (Hongkong) was targeted because it had most of the non-bank creditors. Noting that Swilynn (Hongkong) was not being liquidated, he said his appointment was a ''stabilising mechanism'' to get the company out of trouble. The purpose of the appointment was to preserve the assets of the company, while the bank creditors of Swilynn negotiated with the prospective saviour. Swilynn's stock exchange listing is seen as a valuable part of the group to be preserved. Mr Lees said there were several potential buyers of Swilynn's debt and it was unlikely that such negotiations would be fruitless. The debt buyer was expected to become the future major shareholder in Swilynn. The successful conclusion of those negotiations would lead to a scheme of arrangement being proposed for the restructuring of Swilynn and its subsidiaries. Majority support from creditors and shareholders is needed for the proposed scheme to go through, which would lead to the lifting of suspension of trading in Swilynn shares and warrants. Mr Lees expected that it could take two to three months to have the scheme implemented. Upon the successful implementation of the scheme, which resolves the claims of creditors, the petitioning creditors will apply to the court to withdraw their petition and for the provisional liquidator to be discharged. Swilynn's operations in Britain were placed in receivership in October last year.
