Lai Sun Development is proposing to privatise its media and satellite-television associate eSun Holdings for HK$79.99 million. The privatisation is seen as a bid to reduce Lai Sun's debt exposure, which stood at HK$8.19 billion on July 31 last year. Lai Sun, which owns 49.99 per cent of eSun, will pay 28 HK cents a share to buy out the outstanding 50.01 per cent from minority shareholders. The group, controlled by chairman Peter Lam Kin-ngok, is struggling to reach a compromise with creditors to restructure its debts by the end of next month. Lai Sun owes eSun HK$1.5 billion. If the privatisation goes ahead and eSun becomes a wholly owned subsidiary, the debt will be eliminated from Lai Sun's consolidated balance sheet. The offer price is 27.27 per cent more than eSun's closing price of 22 HK cents before trading was suspended on January 28. However, it is a 91.41 per cent discount to eSun's unaudited consolidated net asset value of HK$3.26 on June 30 last year. ESun shares yesterday resumed trading and surged five HK cents, or 22.7 per cent, to 27 HK cents on the privatisation news. Lai Sun shares were unchanged at 3.2 HK cents on zero turnover. Lai Sun said the offer would increase its eSun shareholding at a discount to the underlying net asset value and would improve the group's financial position, particularly its gearing. At the same time, eSun shareholders would have a chance to realise their investment, given trading liquidity of the shares had been thin. With an estimated net asset value of HK$766 million, Lai Sun's debt-to-equity ratio stands at about 10. Formerly known as Lai Sun Hotels, eSun recorded a HK$33.28 million loss in the first half of last year. It operates East Asia Satellite Television (EAST) with programmes being broadcast on the EAST Life Channel. Last September, it began construction of EAST Television City in Macau. It is also involved in film projects and entertainment business.