Group is undertaking an asset restructuring in a critical move

to help bail out the debt-laden Lai Sun Development (LSD).

"The restructuring will help reduce the group's debt significantly,

especially LSD which has bank loans of more than $5 billion and

soon-to-be-due bonds worth more than $2 billion," said Mark Lee,

director of Lai Sun Garment, the parent of LSD.

Under the restructuring, LSD would take over all the existing

hotel-related business from Lai Sun Hotels (LSH) while LSH will focus

on high-technology development. Mr Lee said LSH may change its name

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later.

The asset restructuring of Lai Sun Group will proceed in three phases

because of its complexity and is scheduled to be completed by the end

of July.

The shares of Lai Sun Garment (International), Lai Sun Development

(LSD) and Lai Sun Hotels International were suspended from trading

yesterday, pending the release of a joint announcement concerning the

first phrase of the restructuring.

Mr Lee expects shares will resume trading next Monday or Tuesday, the

latest.

The suspension of share trading will not affect the sale of Furama

Hotel by LSD, he added.

LSD announced earlier that it is to sell a 65 per cent stake in Furama

Hotel in Central to Singapore-based Pidemco Land, which is part of the

Singapore Technologies group, for $1.88 billion. LSD paid nearly $7

billion in mid-1997 for the hotel to Furama Hotel Enterprises.

All proceeds from the sale of Furama Hotel will be booked to LSD.

Mr Lee said LSD may eventually take over all the hotel-related and

property business from LSH while LSH will become the group's

technology flagship.

Mr Lee said he would neither confirm nor deny if LSD would co-operate

with Softbank in developing a portal.

"LSD will go for the operation of Internet, entertainment and media

business," he said.

He added that while the group would remain the major shareholder of

LSD, it may bring in other strategic partners.

Junichi Goto, director of Softbank, said yesterday in a separate

occasion that Lai Sun Group has contacts with Softbank and the two

parties may establish co-operation in the future.

Meanwhile, Lai Fung Garment plans to turn the north block of Hong Kong

Plaza in Shanghai into a "computer city". It is also considering

setting up a data processing centre within the premises. "This is to

meet the needs and rapid development of Internet-related companies in

the mainland," Rowena Ng, executive director and financial controller

of Lai Sun Holdings, said after the extraordinary general meeting

yesterday.

She added that the company will invest several millions in setting up

the centre.

Lai Fung has increased its stake in Hong Kong Plaza to 94 per cent

from 60 per cent. The tenancy rate in Hong Kong Plaza has already

reached 60 to 70 per cent, Ms Ng said.

The company is also considering to turn Eastern Plaza, a residential

project in Guangzhou, into an intelligent residence to attract more

affluent home buyers. "Since the area has already been installed with

optic fibre, the investment cost will be relatively small."

Eastern Plaza divides into five phases. The second phase has a gross

area of 39,000 square metres. More than 50 per cent of units have

already been sold. Ms Ng said the company is able to reap about 400

million yuan (HK$376 million) if all the units are sold. The

construction of the third phase would start within this year.

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