Lai Sun Development's attempt to privatise associate eSun Holdings was blocked by eSun minority shareholders yesterday, dealing a blow to the company's debt restructuring efforts.
The failure will put further pressure on the financially strapped property company, which is struggling to restructure its HK$8 billion debt and ward off the threat of liquidation.
Lai Sun director Keith Wu Shiu-kee said the negative vote meant Lai Sun could not cancel HK$1.5 billion of debt owed to eSun by privatising.
'It's a pity from Lai Sun's point of view. But we understand and respect the decision of eSun shareholders,' Mr Wu said.
Holders of nearly 70 million eSun shares voted against the HK$79.99 million privatisation offer at a shareholders' meeting while holders of about 20 million shares supported the proposal.
Lai Sun's offer at 28 HK cents per eSun share represented a 91.41 per cent discount to eSun's net asset value of HK$3.26 per share. The offer was branded unfair by Somerley, a financial adviser for eSun minority shareholders.
At yesterday's meeting, some unhappy eSun shareholders even asked eSun management to request Lai Sun's liquidation so eSun could recover part of the HK$1.5 billion debt.