Hanny gets more time on note issue
HUTCHISON Whampoa has given Hanny Magnetics (Holdings) a new deadline - November 7 - to secure the requisite shareholders' approval for the issue of US$36.38 million convertible notes.
The extension comes in the wake of the floppy disk manufacturer's inability to state when it would clarify its financial position after its profits plunged following the acquisition of Memorex from the United States-based Tandy Electronics last year.
A statement issued by the firm said: 'The directors believe that it would not be appropriate to despatch the circular to convene a special general meeting until they announced the prospects of the company.' The shareholders' approval at a special general meeting is a prerequisite for the issue of notes and conversion shares upon the conversion of the notes by Hutchison.
It was announced on September 26 that a wholly owned subsidiary of Hutchison had conditionally agreed to subscribe to a $36.38 million convertible note issue by Hanny.
Initially, the subscription agreement was subject to fulfilment of conditions at the end of this month.
On full conversion, Hutchison will hold 26.73 per cent of the company's shares.
In addition, Hanny said Hutchison's subsidiary would extend the maturity date of a short-term unsecured loan, amounting to the same amount.
Trading of Hanny's shares has been suspended since October 7, when the company was asked by the stock exchange to clarify its prospects.