Debt-ridden Lai Sun Development (LSD) has concluded a long-awaited deal to sell the Four Seasons Hotel in New York to a company called 57 BB Property for US$275 million. The company's hotel arm, Lai Sun Hotels, owns 49.9 per cent of the hotel and stands to raise gross proceeds of US$137.5 million from the deal. Lai Sun never said what sort of price tag it was putting on the hotel, however some rumours suggested the original asking price was in the US$300 million to US$400 million range. In its statement disclosing the sale, Lai Sun said the deal was done at 'prevailing market value'. The hotel had enjoyed 'substantial' capital appreciation since its acquisition, it said. 'In line with the company's investment strategy it is opportune to realise such gains,' it said. The company bought the hotel for US$190 million in a partnership with four other firms in 1997. The other companies involved included Hong Kong Parkview Group, Manhattan Garments Group, Amecor Group and Sunnet Investment Group. LSD said that the historical cost of its stake in the Four Seasons Hotel was about US$98.5 million and that it expected an exceptional profit of about HK$230 million after adjustments and that this would be included in this year's accounts. The hotel disposal forms part of an asset-disposal programme aimed at cutting its heavy debt exposure. In other related news, the company said it would have sufficient capital to redeem its US$120 million fixed-rate bond due in early April following its HK$880 million rights issue last month. The one-for-one issue at 50 HK cents per share represented a 90.1 per cent discount to the company's adjusted net tangible asset value of HK$5.07 per share. It was 94.4 per cent subscribed. Vice-president Keith Jacobsen said the bond, to be redeemed on April 10, would be financed partly by money from the rights issue and partly from property sales. The three-year bond was arranged in 1996 by several banks, including Schroders Asia and Bank of East Asia. The loan was borrowed by LSD's financing unit Lai Sun International Finance. LSD is the guarantor. According to LSD, outstanding borrowings as at November 30 were about HK$11.65 billion, comprising secured bank loans and other borrowings of about HK$7.71 billion. The figure also included unsecured bank loans and other borrowings of about HK$21 million, bonds payable of about HK$1.81 billion and convertible bonds payable of approximately HK$2.1 billion. Mr Jacobsen said while the group's financial position was relatively volatile a few months ago, the situation had since improved. LSD's creditor bankers - including HSBC and Bank of East Asia - had showed support for the company, he said. Earlier, LSD director Lam Kin-ming had hinted that creditor bankers were putting pressure on the group. Mr Jacobsen said the group's diversified overseas investments meant its assets were less hard hit by the slowdown in the regional economy. Mr Jacobsen added that the group did not expect recent legal action begun by an American company to affect the sale of the New York hotel. American Realty Trust, controlled by Dallas real-estate operator Gene Phillips, contends in a lawsuit in New York it made a US$2 million downpayment and signed a letter of intent in October to buy the hotel for US$270 million.