bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

Debt-ridden garment  maker and retailer U-Right International Holdings has been placed under provisional liquidation by bank creditors, becoming the third collapse of a Hong Kong-listed retailer amid the spiralling financial meltdown.
International auditing firm Deloitte Touche Tohmatsu has been appointed provisional liquidator.
Earlier last month, banks applied to wind up Peace Mark (Holdings), Asia's largest luxury watch retailer, and swimwear maker Tack Fat Group International after they  defaulted on loans.
A U-Right spokesman, who was serving his last day at the company yesterday, said the 25-year-old casual clothes manufacturer and retailer was seeking white knights 'but it seems not many are interested'.
Gabriel Chan, an analyst at Credit Suisse, said small-cap companies not in a sound financial position  were vulnerable to cash calls in the quickly deteriorating credit market.
'It is different from the financial crisis we saw in 1997.  Interest rates over the past two years  have been pretty low, which encouraged companies to borrow and expand,' said Mr Chan.
'But when the credit market fell suddenly, those with relatively weak financial positions were hit hard.'
U-Right chairman Leung Ngok had plans to more than double outlets to more than 1,000 shops by the end of  last year.
The company  has about 90 stores in Hong Kong and about 500 franchised outlets on the mainland, although some of them have been closed and staff laid off as the company stopped renewing some lease contracts.
Similarly to Peace Mark, the winding-up petitions came months after the first signs that the company had run into financial problems.
U-Right saw its share price slump as much as 68.89 per cent over the past month and the company admitted that it was unable to satisfy written demands for repayments of HK$850 million of debt in early September. In a statement on September 26, the company said  outstanding  debt owed to  18  banks and other financial institutions  totalled about HK$1.2 billion.
U-Right had planned to raise at least HK$214 million through a rights issue, but this was scrapped by underwriter Kingston Securities, citing 'uncertainties in the financial outlook of the company and the adverse conditions in worldwide financial markets'.
At the end of March, U-Right had non-current assets of HK$1.21 billion and net assets of HK$1.63 billion.
Hard times
U-Right is the third Hong Kong-listed retailer to collapse in the crisis
In September, U-Right's outstanding debts to lenders totalled, in HK$: $1.2b



Creditors place U-Right under liquidation