Medium-sized developer Asia Standard International Group plans to issue convertible bonds to British property giant Grosvenor Group Holdings to raise HK$290 million. Grosvenor already holds 14.9 per cent of Asia Standard. If the five-year bonds are fully converted into shares, Asia Standard will no longer be a subsidiary of Asia Orient Holdings. Asia Standard said the bond issue would strengthen its relationship with Grosvenor and was expected to result in further co-operation between the two groups in the form of joint investments and property projects. Under the scheme, Grosvenor will be able to convert the bonds into Asia Standard shares at 45 cents each two years after the issue. The conversion price represents a 26.76 per cent premium on the stock's Friday close of 35.5 cents but a 59.82 per cent discount on its book value of $1.12 on March 31. The conversion may therefore dilute the underlying net asset value per share of existing shareholders, according to a company announcement. Grosvenor will be paid interest every six months based on an annual rate of 7 per cent. Any bonds not converted will be redeemed in the fifth year at 118.3 per cent of the principal amount. If fully converted, Asia Standard will have to issue 644.44 million new shares, representing 13.5 per cent of the enlarged share capital. This will push Grosvenor's shareholding interest to 26.4 per cent of Asia Standard, while Asia Orient's interest in Asia Standard will decrease from 53.4 per cent to 46.1 per cent. The bond issue deal is conditional on various factors including the approval of Asia Standard and Asia Orient's shareholders. Another condition is the full redemption of the US$40 million 7 per cent convertible bonds due on November 29 issued by Asia Standard. These bonds were issued in 1996 with outstanding bonds only amounting to US$32.5 million. The company said it would redeem the outstanding bonds internally. This means the HK$290 million bonds will only increase Asia Standard's debt by $36.5 million following the bonds' redemption at the end of this month. The gross proceeds of Asia Standard's issue will be used to repay bank borrowings. Asia Standard made a loss of $357.65 million for the year to March 31. Its audited net asset value on March 31 was $4.6 billion. Meanwhile, small developer Cheuk Nang (Holdings) has announced a rights issue scheme to raise $32.3 million. Under the proposed scheme, the company will allot one rights share for every two existing shares at two cents per rights share. This represents a 35.48 per cent discount to the stock's 3.1 cents close on Monday. The total rights issue represents 33.33 per cent of the company's enlarged share capital. Cheuk Nang's major shareholder Cecil Chao Sze-tsung owns 61.93 per cent of the company and has undertaken to subscribe all of his entitled rights shares.