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2006-10-24 08:17:00 a.m. HKT, XFNA
South China Industries, Capital Publications in 800 mln hkd asset-shr swap
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deal
HONG KONG (XFN-ASIA) - South China Industries Ltd said it has agreed to
transfer its 80 pct stake in a property in China's Shenyang City to affiliate
Capital Publications Ltd (CPL) in an 800 mln hkd deal.
The companies said in a joint statement that CPL, in exchange for the
assets, will issue 800 mln hkd worth of five-year notes, which may be
converted into CPL shares at 0.075 hkd each.
CPL will be allotting 10.7 bln company shares representing 95.47 pct of
the company, making South China its majority owner upon conversion.
Following the deal, CPL, which produces Chinese financial and economy
magazines including ""Capital"", ""Capital CEO"" and ""Capital Entrepreneur,"" will
participate in China's property development business, the statement said.
CPL described property development in China as a ""solid business area,
which will generate recurrent cashflow ... and contribute positively to CPL's
operating results.""
The Shenyang property is expected to be converted into a seven-story
shopping mall with a gross floor area of 125,500 square meters. The 7,622 sqm
site is located in a prime commercial area in Shenyang City in Liaoning
province.
Company director Ng Hung Sang and his associates own 68.45 pct of CPL and
74.79 pct of South China.
CPL, a company listed on the Growth Enterprise Market, proposed to change
its name to South China Land Ltd following the deal.
As of 3.48 pm, South China was up 0.01 hkd or 0.88 pct at 1.15 and CPL up
0.245 hkd or 490 pct at 0.295.
(1 usd = 7.8 hkd)
leonora.walet@xfn.com
lw/net xfnlwm/xfnnt
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