Egana International (Holdings), which makes and distributes Pierre Cardin watches and Goldpfeil leather goods, has built a $116.55 million war chest to finance expansion into electronic commerce. Director David Wong Wai-kwong said Egana planned to bring its e-commerce model in Germany into Asia and the United States in an attempt to save operating costs and boost awareness of its brands. The German model focuses on enhancing efficiency and reducing operating costs. 'We're not blindly diving into the information technology wave,' Mr Wong said. 'The e-commerce development aims at trimming costs and hence bolsters the bottom line.' Funding for the development stems from the issue of $116.55 million unsecured convertible debentures to investment bank Credit Suisse First Boston (Hong Kong) (CSFB). Due in 2002, the debentures carry 4.5 per cent interest. They can be converted into 416.25 million new Egana shares at about 28 cents a share. On conversion, CSFB will hold 4.1 per cent of the enlarged Egana. Egana's first step was forming the IT vehicle Egana.com, the holding company for the group's e-commerce business, in January. Egana.com holds the group's e-commerce business in Germany, Switzerland and Italy. 'The next step is bringing the e-commerce models in these countries into Asia and the United States,' Mr Wong said. 'We won't rule out an eventual floatation of Egana.com in any stock markets in the future.' Mr Wong said Egana would focus on intranet, which integrates internal processes such as ordering, sourcing, manufacturing and distributing, and extranet, which links the group's suppliers, customers and distributors. For example, ordering from Germany, sourcing materials from Italy and manufacturing products on the mainland can be achieved through the intranet. Through the use of intranet, a 5 per cent saving on time and costs in the first year of Egana.com's operations was likely, he said. However, Egana would not involve itself in Internet retailing, Mr Wong said.