CITIC Pa beijing massage cific shareholders accept parent's bail-out plan
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CITIC Pacific shareholders accept parent's bail-out planPublished: 26 Dec 2008 01:13:26 PST
Dec. 24, 2008 (China Knowledge) - CITIC Pacific<267>, the ailing Hong Kong-listed arm of China's largest state-owned investment enterprise CITIC Group, announced that its shareholders had given green light to the rescue plan from parent.

According to CITIC Pacific's statement filed with the Hong Kong Stock Exchange, the company will issue HK$11.6 billion worth of convertible bonds to CITIC Group in exchange for the standby loan of the same amount.

Meanwhile, the parent would assume liabilities worth of HK$9.3 billion or about two thirds of CITIC Pacific's derivative contracts that bet on the movement of the Australian dollar.

Larry Yung Chi-kin, chairman of CITIC Pacific, said the decision to accept the bail-out plan was the company's best option, and declined to answer the question whether he would resign.

CITIC Pacific announced earlier this month its realized and potential losses from unauthorized foreign exchange contracts has risen to HK$18.6 billion as of Nov. 26, from HK$16.8 billion it reported in November, due to the weakness of the Australian dollar.

Late in October, Hong Kong's Securities and Futures Commission (SFC) announced it had started probing into the company for delaying an announcement for six weeks about its losses from unauthorized currency trading.



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