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Denise Tsang

Zen Pacific Construction, the construction division of Wai Kee Holdings, has shelved its proposed spin-off indefinitely in the wake of poor market sentiment, Zen's deputy chairman Derek Zen Wei-peu said.

 The spin-off was originally planned for this year, he said yesterday.

 'We have no timetable for the spin-off as the general economic environment in the region has yet to improve,' he said.

 Some companies have taken advantage of resurgent market conditions to launch fund-raising exercises in recent weeks.

 New World Development raised $2.34 billion from a share placement on Monday.

 However, Mr Zen said the upturn in market sentiment was just temporary.

 'The civil engineering sector will remain quiet in the first half of this year. But it will get better after June because of infrastructure projects such as the KCRC West Rail and MTRC's Tseung Kwan O extension,' he said.

 Zen Pacific had fulfilled stock exchange listing requirements such as a three-year record of profitability, but had yet to appoint a sponsor for the proposed spin-off, he said.

 During the three months to December, Zen secured $5.3 billion in contracts.

 This took the full-year total in contracts to $6.1 billion, a rise of more than 100 per cent from 1997.

 The division generated $72.6 million, or about one quarter, of infrastructure and construction group Wai Kee's $211.82 million pretax operating profit in the year to March 31 last year.



Zen Pacific shelves spin-off plans on sentiment concerns