Creditor banks of insolvent Siu-Fung Ceramics have continued to sell the company's assets despite agreeing 'in-principle' to the rescue plan offered by garment tycoon Charles Yeung Chun-kam.
The company yesterday said its largest creditor HSBC, received $88 million for the sale of Siu-Fung's Tsim Sha Tsui property, representing only 23.4 per cent of the $375 million the company originally paid for it in 1994.
The sale resulted in a loss of $280 million due to a huge drop of the property's value, the company said.
Property analysts said since the property was bought at a bad time, the huge drop was understandable.
'The price of commercial property in the area has generally dropped 50 to 60 per cent in the last five years,' said Jacob Wong Yiu-tong senior manager of Hong Kong property agent Treasure Land.
'In 1994, people were willing to pay a higher premium for those properties on upper floors, such as this one, but now they are not.' One of Siu-Fung's 13 creditor banks Dao Heng Bank disposed of about 31.4 million shares of Siu-Fung last month.