HK Tycoons Selling $8.4-B Assets To Cut Debt

Swire Pacific Ltd. has become the second notable Hong Kong company to reveal plans to offload assets in as many days to reduce debt in the face of rising borrowing costs, Danny Lee, Rebecca Choong Wilkins and Shirley Zhao reported for Bloomberg News.

Photo Insert: The conglomerate said late Wednesday it will sell its US beverages business to its controlling shareholder run by the wealthy Swire family for $3.9 billion.

The conglomerate said late Wednesday it will sell its US beverages business to its controlling shareholder run by the wealthy Swire family for $3.9 billion.

The sale would lower the company’s indebtedness by more than one-third. The firm also proposed a special dividend of about HK$11.7 billion ($1.5 billion), representing about half of the expected gain from the disposal.

The deal came a day after the billionaire Cheng family announced a similarly structured $4.5 billion deal to buy a unit owned by builder New World Development Co.

The move shifts cash from the family’s investment holding firm to New World, one of the city’s most indebted real estate firms. In Hong Kong, which imports its monetary policy from the US due to a currency peg with the greenback, the one-month cost of interbank borrowing has jumped to about 5% from less than 1% a year ago.

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