Loss-making publisher Hong Kong Daily News Holdings (HKDN) plans to issue new shares worth $22 million in exchange for Koniko - a company which makes apparel for retailers such as Brooks Brothers, Banana Republic and Saks.
The new shares, equivalent to 21.96 per cent of the enlarged share capital, will be issued to Koniko proprietors John Ling Tai-yuk and Kong Ho-pak.
The deal will see the holding of substantial shareholder Emperor International Holdings dwindle further to 47.2 per cent from 60.48 per cent as a result of the dilution effect.
Emperor - in which Albert Yeung Sau-shing has a substantial stake - has been trimming its stake in HKDN since January.
A HKDN spokesman yesterday justified the deal, saying: 'The diversification is aimed at improving the group's profitability.' Koniko makes women's wear for British-based Ann Taylor, Ann Taylor Loft, and US retailers such as Nordstrom, Talbots and Eddie Bauer.
For the year to December 31, Koniko reported a $5.32 million attributable profit compared with a $4,150 attributable loss during the nine months to December 31, 1997.
