"Debt Transfer Agreement"
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Incorporated in Hong Kong with limited liability) DEBT TRANSFER AND EXCHANGE RELATING TO THE INDEBTEDNESS OF THE GROUP The Board was informed by HSBC that the transfer to Creator of the Group’s debt owed to the Banks and the FRN Holders pursuant to the Transfer Agreement had been completed on 16 January 2004. The debt transferred includes principal of approximately HK$1.4 billion together with interest accrued thereon. The Board was further informed by HS Bank that it had today assigned its right, title and interest under or in respect of a loan of approximately HK$30 million to Creator. Reference is made to the announcements issued by the board (the “Board”) of directors of Hong Kong Construction (Holdings) Limited (the “Company”) on 17, 23 and 31 December 2003 and 7 January 2004 (the “Prior Announcements”) regarding, amongst others, the proposed sale of debt by the financial creditors of the Company and certain of its subsidiaries (together, the “Group”) to Creator Holdings Limited (“Creator”), which is not a connected person of the Company (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited). Capitalised terms used herein shall have the same meanings ascribed thereto in the Prior Announcements unless otherwise defined. The Board was informed by HSBC that the transfer to Creator of the Group’s debt owed to its eleven bank creditors (the “Banks”) and holders of US$65 million guaranteed floating rate notes issued by a subsidiary of the Company (the “FRN Holders”) pursuant to the debt transfer and exchange agreement dated 20 December 2003 (the “Transfer Agreement”) had been completed on 16 January 2004. The debt transferred includes principal of approximately HK$1.4 billion together with interest accrued thereon. The Board was further informed by Hang Seng Bank Limited (“HS Bank”) that it had today assigned its right, title and interest under or in respect of a loan of approximately HK$30 million to Creator. The amount of indebtedness assigned to Creator represents substantially all of the indebtedness owing by the Group to the Banks and the FRN Holders save and except (i) a CITIC Ka Wah Bank loan of HK$150 million as secured by a mortgage over certain properties owned by a subsidiary and an associated corporation of the Company in Shun Hing Square, which is being refinanced by CITIC Ka Wah Bank; and (ii) a CITIC Ka Wah Bank loan of approximately HK$72 million as guaranteed by China Everbright Holdings Company Limited (“China Everbright”), which has been settled by China Everbright prior to the completion of the Transfer Agreement. Creator has yet to decide whether it will seek changes to the existing terms of the debt but will negotiate the same with the Company after completion of the Transfer Agreement. Accordingly, the standstill letter dated 7 June 2001, the restructuring agreement dated 27 August 2002 and other related standstill documents, other than a guarantee and debenture dated 3 December 2001 (the “Debenture”) would cease to have any further force and effect as if they have been terminated with effect from the completion of the debt transfer. The Debenture executed by the Company and certain of its subsidiaries in respect of certain of their undertakings, rights, properties and assets, however, would continue in full force and effect and Creator has been assigned the right, title and interest of the Banks thereunder pursuant to an assignment and novation executed today by the Banks, the FRN Holders and Creator. Creator has accordingly become the Bank Security Trustee and the sole Secured Party (both as defined in the Debenture) under the Debenture. The Company has been notified of the foregoing arrangements, and has consented to the assignment of the rights and obligations of the Banks to Creator under the relevant loan documents and the Debenture. The Company has been further informed by Creator that it has no current intention to acquire shares in the Company. Shareholders of the Company and the public are advised to exercise caution when dealing in the shares of the Company. By order of the Board HONG KONG CONSTRUCTION (HOLDINGS) LIMITED YAO Jian Ping Managing Director Hong Kong, 16 January 2004 Please also refer to the published version of this announcement in The Standard and Hong Kong Economic Times.