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2007-4-27 04:02:00 p.m. HKT, XFNA
Hong Kong's Paliburg Hldgs to buy unit Regal convertible bonds for 360 mln hkd
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HONG KONG (XFN-ASIA) - Paliburg Holdings Ltd said it has agreed to buy
convertible bonds issued by unit Regal Hotels International Holdings for a
total consideration of 360 mln hkd, although the bonds have an aggregate
principal amount of only 125 mln hkd.
The company said the bonds can be converted into 500 mln Regal Hotel
shares, based on the current conversion price of 0.25 hkd, which is a big
discount to Regal's current market price of 0.68 hkd.
Paliburg said in a statement there are outstanding Regal Hotels warrants
conferring rights on their holders to subscribe to 226.6 mln new Regal shares
at 0.25 hkd each.
If all the outstanding Regal warrants were also exercised, the
shareholding interest of Paliburg in Regal would be diluted to 39.83 pct from
45.88 pct, it said.
Paliburg said the purpose of its acquisition of Regal Hotel's convertible
bonds is to allow the company to hedge against the potential dilution in its
shareholding interest in Regal as a result of the exercise of the unit's
convertible bonds and warrants.
roby.lau@xfn.com
rl/net xfnrl/xfnnt
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