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SCMP Reporter

Paliburg Holdings says it is back in the property game after emerging from a sea of debt last year and is looking to replenish its land bank for new residential projects.

Chairman Lo Yuk-sui said the firm was focusing on new projects in developed mainland cities, which could provide a profit margin of more than 30 per cent.

'Cities that we are looking at include Beijing, Shanghai, Shenzhen and Hangzhou,' Mr Lo said, adding most of the projects targeted were residential.

'We are also keeping an eye on available sites in Hong Kong but the competition here is very intense and the prices are quite hefty.'

He also said the firm was not interested in acquiring established investment properties.

Mr Lo said the firm was still negotiating with mainland partners to raise its holding in the 4.6 million square foot hotel-office development in Chaoyang, Beijing's core business district, to more than 50 per cent.

Paliburg and associate firm Regal Hotels International jointly hold 23 per cent of the project, which has been suspended since they and parent Century City International Holdings first ran into financial difficulties in 1998 with combined losses of $9.98 billion - the biggest loss announced by a publicly listed group in Hong Kong at the time.

'We are now planning to add another four-star hotel to the Chaoyang project,' Mr Lo said, adding the hotel would cost 'a few hundred million dollars'.

The site formation work for a 900,000 sqft  residential project in Ap Lei Chau, in which the company held a 30 per cent stake, would start shortly as the basic terms and the land premium amount for the leased modification had been agreed and finalised with the government, he said.

Asked how Paliburg would finance  its forthcoming projects, Mr Lo said: 'We have about $100 million cash on hand but I will not rule out that we will enlarge the shareholder base.'

The company yesterday reported a net profit of $144.1 million  for the six months to  June,  up 281.2 per cent  from  the same period last year,  mainly driven by Regal,  which had contributed a profit of  $135.6 million in the period.

Earnings per share increased to two cents, up from 0.83 cent.

At the height of  the group's financial problems, it struggled with about $14.8 billion in debt, forcing the sale of  most of its assets.

In October last year, Mr Lo agreed to a $1.79 billion debt restructuring programme with creditors, leaving the Century City group almost debt-free.

Meanwhile, Century City, which holds a 55 per cent stake in Paliburg, has returned to the black and reported a net profit of  $72.3 million  for the six months to June, recovering from a loss of $51.9 million  in the corresponding period last year.

Earnings per share for the period  were  0.51 cent compared with a loss of  0.96 cent  a year earlier.

Neither Paliburg nor Century City  declared an interim dividend.

'I hope we can declare a dividend in our full-year result,' Mr Lo said.

The chairman also said he would not rule out the possibility of increasing his stake in Century City in the medium to long term.



Paliburg returns to the black with quest for new land