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SCMP Reporter

'Hong Kong tobacco tycoon Charles Ho Tsu-kwok is proposing to consolidate his control of the 64-year-old Sing Tao newspaper group through a complex asset reshuffle.

The deal will see Mr Ho's listed flagship, Global China Technology, recoup its entire investment in Sing Tao Holdings a year after taking over - while continuing to hold its main media assets.

Global China is proposing to strip out the media business into a separate unlisted company called Sing Tao Media.

It will then sell the listed company shell to Shanghai businessman Yao Yuan and his family company, Shanghai Mingyu Enterprise Group, for HK$163.8 million, or about 52.4 cents a share.

Sing Tao and Global China shares were suspended from trading yesterday pending the announcement of the transactions. Sing Tao shares were last traded at 97.4 HK cents while Global China closed at 46 HK cents on Wednesday.

Sing Tao Media will include the listed company's two newspapers, Sing Tao Daily and the English-language Standard, and three magazines, East Touch, Teens and PC Market.

Sing Tao's headquarters property in Kowloon Bay - estimated to be worth HK$160 million - and its 50 per cent interest in the Toronto Colony Hotel will be transferred to Sing Tao Media, according to Mr Ho.

Sing Tao Media shares will be distributed as a special interim dividend to existing shareholders, effectively allowing a 74.5 per cent interest to be transferred to Global China.

Global China will then offer to buy out Sing Tao minority shareholders' interest in the unlisted media vehicle by exchanging 1.75 Global China shares for each Sing Tao Media share.

If, as is likely, all Sing Tao shareholders accept the offer, Global China will take full ownership of Sing Tao's media business.

Mr Ho said Sing Tao shareholders would have nothing to lose but much to gain as they could realise the value of the property assets and remain in full control of Sing Tao's media business through Global China.

Mr Ho owns 50.3 per cent of main-board-listed Global China.

Global China chief executive Wong Wai-ming said the deal was aimed at fully integrating Sing Tao's media operations with Global China's media investments in order to better utilise resources and improve operational efficiency. It would allow the company to focus on the media business in the Greater China region, Mr Wong said.

Global China's announcement said Sing Tao's net tangible asset value at the end of December was HK$1.80 a share.

Global China paid HK$518 million for 74.5 per cent of Sing Tao Holdings in March last year. Its purchase included a 51.36 per cent stake held by Lazard Asia Fund, which the fund bought from debt-ridden Tiger Balm heiress Sally Aw Sian in 1999. Ms Aw was forced to sell originally due to a debt owed to the Ho family.

Since then Global China has gradually disposed of Sing Tao's non-core assets, including certain properties and its commercial printing business, to raise about HK$500 million cash.

It is estimated Sing Tao has at least HK$563.27 million in net cash on hand based on the company's circular on the disposal of the printing business.

Together with the HK$163.8 million cash from selling Sing Tao's remaining equity stake and property assets, Global China's net cash would be increased to about HK$1 billion from last year's HK$332 million after the transaction.

Graphic: glob05gbz



Ho tightens Sing Tao grip