SHUN Tak Holdings is considering issuing US$200 million in convertible bonds to fund property development in Hong Kong. Its chairman, Stanley Ho Hung-sun, said issuing convertible bonds was one alternative for raising funds, but emphasised that there would be no equity issue at this stage. In Hong Kong, Shun Tak is hoping to boost its land bank through innovative redevelopment of Civil Servants' Co-operative Building Society sites. The firm is hoping to win approval soon for redevelopment of Belcher Gardens and Chatham Gardens. Mr Ho said other housing associations were interested in co-operating with Shun Tak on redevelopment. The company plans to invest $6 billion to redevelop Belcher Gardens and Chatham Gardens. It is understood that Leung Sik-hung, chairman of the Civil Servants Co-operative Building Society has written to Governor Chris Patten urging a waiver of existing rules that require 100 per cent acceptance by occupants before dissolution of the society,a prerequisite for redevelopment. In an impassioned plea, Mr Leung said that most of the society members were pensioners and could face bankruptcy due to the high cost of maintaining dangerous slopes around Belcher Gardens. He described the situation as ''desperate''. Shun Tak claims to have 92 per cent acceptance for its redevelopment proposal. It will take on financial responsibility for making the slopes safe. There are 364 occupants in the two buildings. Mr Ho said that the company was also appealing to the Government for a reduction in the acceptance requirement. ''We have written a letter requesting the Government to reduce the requirement. We have got 92 per cent on hand, if the Government says 90, we are still alright,'' he said ''In fact, we really have a point to appeal to the Government, Belcher Gardens is located near a dangerous slope. ''Occupants are afraid of a landslide. After the incidents last year, owners of the co-operative have written to the Public Works Department asking for full restoration. They received a reply which identified some three dangerous slopes close to their building. ''But they don't have the money to make the necessary repairs,'' said Shun Tak director Anthony Chan. ''And now they have a developer who is in a position to offer them acceptable terms. ''I think every one would agree that these are favourable terms because after redevelopment they will be able to get their units back,'' he continued. This was the first deal involving the government and the company, according to Mr Chan. Mr Chan revealed that they had over 200 housing scheme projects. Belcher Gardens and Chatham Garden were the largest, with site area of 322,894 square feet. ''According to the present zoning, we can build at the plot ratio to the maximum eight. But we will be quite content if we can achieve a plot ratio of seven to 7.5,'' said Mr Chan. Shun Tak's other major development in the territory is at Cheung Sha Wan marine site redevelopment. It is expected that the construction cost of Cheung Sha Wan will well exceed $2 billion, depending on the premium and the plot ratio. The company plans to build an industrial building on the Cheung Sha Wan site, which was obtained by relocating ship repair facilities to make way for the West Kowloon reclamation project. The company has started moving its existing shipyard in Cheung Sha Wan to a new shipyard on Stonecutters Island by October. The company is negotiating with the government to build six shipyards, and it has a total land area of over 500,000 sq ft. ''There are two shipyards. It's already big enough to develop on our own. ''Our company has entered into a joint agreement with China Merchants, which has a site next to ours, for a joint development, taking the total area of the site which can be developed to over 3500,000 sq ft,'' said Mr Chan. Finance director Mr Tse stressed that the company had a low gearing and had a $500 million banking facility available, so there was no concern about the financing of the projects.
