Lai Sun Development
Encyclopedia
Lai Sun Development is a public company listed on the Hong Kong Stock Exchange established in 1987 by the textiles magnate Lim Por-yen
. His company, Lai Sun Garment, ("LSG") was founded in 1947, is also listed on the Hong Kong Stock Exchange
. Lai Sun Garment is the controlling shareholder in LSD.
The Company is headed by Peter Lam
, son of the founder, who also runs the Media Asia Entertainment Group
.
7 billion for Furama Hotel Enterprises in June 1997. Lai Sun acquired a 45.42 per cent stake for $3.13 billion, and made a general offer at $33.50 for each remaining shares at a total cost of $6.893 billion.
While the other Furama Group hotels became part of the hotels division, Lai Sun Hotels, LSD intended to combine the Furama plot with the Ritz Carlton plot, which it already owned, for redevelopment into a prime office block. Then the Asian financial crisis struck, plunging the entire group into distress and forced asset sales.
The company had geared
itself up heavily in order to finance the acquisition at the top of the market. It had taken took on $5 billion in bank loans and issued bonds worth more than $2 billion. Its value halved in the ensuing months, plunging the company into crisis. In 2000, the parent company commenced restructuring the group operations. In March 2000, LSD announced that a 65% stake in the Furama would be sold to a 50:50 joint venture between Pidemco, controlled by Temasek Holdings
, and AIG for HK$1.88 billion. As part of the deal, Lai Sun would continue to operate the hotel until its redevelopment, at an annual rental of HK$145 million. The Furama closed in November, and was demolished in December 2001. Together with CapitaLand
, and AIG
, LSD formed Bayshore Development Group to develop AIG Tower, a 39-storey commercial office block with a gross floor area of 450,000 square foot (41,800 m²). AIG and CapitaLand each owned 35 per cent, and Lai Sun owns 30 per cent.
The asset sales to ungear the company continued - debt remained above HK$6 billion as at September 2002, when LSD sold its 32.75 per cent stake in Asia Television Limited
(ATV) to its chief executive, Chan Wing-kee, for HK$360 million
would take a 40% stake in the company for a consideration of HK$1.37 billion, while LSD stake would fall to 60%. The project to redevelop the 14900 sq ft (1,384.3 m²) site as an office tower, due to complete in 2011, will be partly occupied by the CCB. The hotel formally closed its doors on 1 January 2008, and has become probably the largest billboard n Hong Kong.
Lim Por-yen
Lim Por-yen was a Hong Kong textiles tycoon and banker. He founded the Lai Sun Group , and his family was the biggest shareholder of Asia Television .-Biography:...
. His company, Lai Sun Garment, ("LSG") was founded in 1947, is also listed on the Hong Kong Stock Exchange
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
. Lai Sun Garment is the controlling shareholder in LSD.
The Company is headed by Peter Lam
Peter Lam
Peter Lam Kin-ngok , son of industrialist tycoon Lim Por-yen and his second wife, U Po-chu, is the Chairman & CEO of Media Asia Entertainment Group.-2008 Speeding offense:...
, son of the founder, who also runs the Media Asia Entertainment Group
Media Asia Entertainment Group
Media Asia Entertainment Group , Media Asia Group , is a Hong Kong production company and distributor for films made in Hong Kong and throughout China. It is a subsidiary of Lai Sun Development Company Ltd.- History :...
.
1997 financial crisis
Lai Sun Development, then already under the management of Peter Lam, paid HK$Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
7 billion for Furama Hotel Enterprises in June 1997. Lai Sun acquired a 45.42 per cent stake for $3.13 billion, and made a general offer at $33.50 for each remaining shares at a total cost of $6.893 billion.
While the other Furama Group hotels became part of the hotels division, Lai Sun Hotels, LSD intended to combine the Furama plot with the Ritz Carlton plot, which it already owned, for redevelopment into a prime office block. Then the Asian financial crisis struck, plunging the entire group into distress and forced asset sales.
The company had geared
Leverage (finance)
In finance, leverage is a general term for any technique to multiply gains and losses. Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives. Important examples are:* A public corporation may leverage its equity by borrowing money...
itself up heavily in order to finance the acquisition at the top of the market. It had taken took on $5 billion in bank loans and issued bonds worth more than $2 billion. Its value halved in the ensuing months, plunging the company into crisis. In 2000, the parent company commenced restructuring the group operations. In March 2000, LSD announced that a 65% stake in the Furama would be sold to a 50:50 joint venture between Pidemco, controlled by Temasek Holdings
Temasek Holdings
Temasek Holdings is an investment company owned by the government of Singapore. With an international staff of 380 people, it manages a portfolio of about S$193 billion at end of March 2011, focused primarily in Asia...
, and AIG for HK$1.88 billion. As part of the deal, Lai Sun would continue to operate the hotel until its redevelopment, at an annual rental of HK$145 million. The Furama closed in November, and was demolished in December 2001. Together with CapitaLand
CapitaLand
CapitaLand Limited is the result of a merger in the year 2000 of then DBS Land and Pidemco Land. It is one of Asia's largest real estate companies. Headquartered and listed in Singapore, the company's core businesses are real estate development, hospitality and real estate financial services...
, and AIG
American International Group
American International Group, Inc. or AIG is an American multinational insurance corporation. Its corporate headquarters is located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in...
, LSD formed Bayshore Development Group to develop AIG Tower, a 39-storey commercial office block with a gross floor area of 450,000 square foot (41,800 m²). AIG and CapitaLand each owned 35 per cent, and Lai Sun owns 30 per cent.
The asset sales to ungear the company continued - debt remained above HK$6 billion as at September 2002, when LSD sold its 32.75 per cent stake in Asia Television Limited
Asia Television Limited
Asia Television Limited is one of the two free-to-air television broadcasters in Hong Kong, the other being rival Television Broadcasts Limited . It launched in 1957 under the name Rediffusion Television as the first television station in Hong Kong...
(ATV) to its chief executive, Chan Wing-kee, for HK$360 million
Ritz Carlton plot
The plot was held by Diamond String, a 76.57% group-owned entity. In November 2007, it was announced that China Construction BankChina Construction Bank
China Construction Bank is one of the 'big four' banks in the People's Republic of China. To date, it is ranked as the nation's second largest and the second largest bank in the world by market capitalization and 12th largest company in the world. The bank has approximately 13,629 domestic branches...
would take a 40% stake in the company for a consideration of HK$1.37 billion, while LSD stake would fall to 60%. The project to redevelop the 14900 sq ft (1,384.3 m²) site as an office tower, due to complete in 2011, will be partly occupied by the CCB. The hotel formally closed its doors on 1 January 2008, and has become probably the largest billboard n Hong Kong.