(Hong Kong, 4 October 2005) Hutchison Harbour Ring ("HHR" - HKSE 0715), a 62 per cent owned subsidiary of Hutchison Whampoa Limited ("HWL"), today announced that it has reached agreements to acquire 100 per cent interest of The Center at 989 Changle Road in Shanghai; together with 204 underground parking spaces and a clubhouse in an adjacent residential development, for a total consideration of USD 300 million.
The Center, a 40-storey grade A office tower, is jointly (50:50) owned by Cheung Kong Holdings Limited and HWL.
Concurrently, HWL has agreed to subscribe for a convertible note to the amount of USD 128.2 million at two per cent interest per annum, with a maturity of five years.
HHR Managing Director Mr Ko Yuet-ming said the acquisition of The Center would substantially expand HHR's investment property portfolio and provide stable recurring income to HHR.
Apart from the manufacturing and supply of toys and high-end electronic products and mobile phone accessories as well as licensing and sourcing of consumer products, Mr Ko said property investments for stable rental income, especially in Shanghai, had always been one of HHR's core businesses and had continued to provide satisfactory rental yields and occupancy rates.
"The addition of The Center to our portfolio represents a valuable opportunity to pursue our strategy of replacing existing ageing investments by a newly constructed, high quality tenanted commercial building with good market appreciation potential that can generate stable cash flow and strong rental yield," Mr Ko said, adding that the general expectation of Renminbi appreciation would boost further the market value of properties that generate income in such currency.
HHR Deputy Chairman and Deputy Managing Director Mr Lewis Luk said the issue of convertible note to HWL would raise immediate funds for HHR as general working capital, and for supporting HHR's new business start-up and other acquisitions.
Such a convertible note arrangement would provide HHR with a favourable structure to get funding to support its business development, he said.
"We are also delighted to provide HWL, which is already our controlling shareholder, with an option to increase its shareholding in HHR," Mr Luk said.
The Center is a landmark in the Xuhui financial district of Shanghai. The acquisition comprises a total gross floor area of 98,337 square metres, including 204 underground parking spaces, and a clubhouse located at the adjacent residential development, The Summit. The Center houses Hutchison Whampoa Properties (Shanghai) Limited as well as well-known accounting firms, consulates and multinational corporations.
Following the acquisition, an HWL subsidiary will be appointed to handle estate, leasing and letting management of The Center.
The transactions are subject to the approval by independent shareholders of HHR at a Special General Meeting. An independent financial adviser will be appointed to advise the independent board committee and independent shareholders of HHR.
About Hutchison Harbour Ring Limited ("HHR")
Hutchison Harbour Ring Limited ("HHR") specialises in the production of a wide range of toys for world leading toy brands, and in the design, marketing and sales of telecommunication accessories, premium and electronic products, licensing as well as property investment. HHR has been listed on the Stock Exchange of Hong Kong since 1991 (Stock Code: 715).
Issued on behalf of Hutchison Harbour Ring Limited by
Choice Communication International Limited
For inquiries, please contact:
Hutchison Harbour Ring Limited
Mr Jeremy Lau
Tel: (852) 2128 1207
Email: jeremyl@hwl.com.hk
Choice Communication International Limited
Mr Anthony Yu
Tel: (852) 9388 0188
Email: anthony.yu@choice-pr.com
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