| To: Business Editor | For immediate release |
23rd November 2000 - Hongkong Land Holdings Limited today announced that it intended to enhance the Company's capital structure through a Tender Offer for the repurchase of part of its outstanding share capital. The proposals give shareholders the choice to sell shares at a premium to the market price or to increase their proportionate stake in the Company by retaining their shares.
Tenders will be invited in the range of US$1.87 to US$2.20 per share. The price range represents a premium of up to 14.6 per cent. over the closing price of the shares on the Singapore Stock Exchange on 22nd November 2000. The Tender Offer will be for up to 260 million shares (representing approximately 10 per cent. of the Company's issued share capital). If fully subscribed, this will result in the Company returning between US$486 million and US$572 million to shareholders.
Background
Hongkong Land's core business, the Hong Kong Central commercial property market, is recovering strongly. Demand for office and retail space is high but new supply is limited and is expected to remain so over the next two years. Occupancy in Hongkong Land's Central office portfolio exceeds 97 per cent.
Market rents in Hong Kong Central have risen rapidly this year, although inherent time lags in the rent reversion cycle mean that Hongkong Land will not have positive reversions until mid 2001. Nevertheless it is expected that this strong rental growth will result in an increase in the capital values of Hongkong Land's Central properties when they are measured at the year end.
Hongkong Land has traditionally maintained a conservative financial structure. As at 30th June 2000, net debt amounted to approximately 13 per cent. of shareholders' funds. The Board of Hongkong Land considers that it would be in the interests of shareholders to increase this level of gearing through a reduction in capital whilst leaving the Company still strongly financed and well able to pursue attractive property and infrastructure investment opportunities.
The proposed tender will enhance net asset value per share and create a more efficient capital structure for the Company that will enhance future investment returns to shareholders.
The Company therefore considers the benefits of the Tender Offer to be as follows:
Further Terms
The Tender Offer will close on 21st December 2000.
Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in a circular which will be posted to shareholders on 24th November 2000.
The Tender Offer is available to all registered shareholders with registered addresses outside Canada, Japan, Malaysia or South Africa. In addition, the Tender Offer will also be available to depositors holding shares through the CDP scripless system in Singapore. Holders of American Depositary Shares will be required to withdraw the relevant Shares from the US Depositary in order to participate in the Tender Offer.
Jardine Strategic
The Directors have been informed that Jardine Strategic Holdings Limited has no present intention of tendering its shares under the Tender Offer in respect of its holding of approximately 887.3 million shares representing approximately 34.2 per cent. of the currently issued share capital of Hongkong Land.
If the full 260 million shares are repurchased, Jardine Strategic's shareholding in Hongkong Land would increase to approximately 38 per cent. of the currently issued share capital of the Company.
The Group
Hongkong Land owns and manages some 5 million sq. ft of prime office and retail space in the heart of Hong Kong's Central business district. The Group also manages a portfolio of property and infrastructure in Asia and is currently active in the Hong Kong SAR, Mainland China, Singapore, the Philippines, Vietnam and Indonesia.
For further information, please contact:
| Hongkong Land Limited Nicholas Sallnow-Smith | (852) 2842 8401 |
| Golin/Harris Forrest David Dodwell | (852) 2501 7902 |
This and other Company announcements can be accessed through the Internet at "www.hkland.com".
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