Lifestyle seeks to buy EganaGoldpfeil stake under HK$1.5b rescue proposal

Lifestyle International Holdings, the Hong Kong retailer controlled by Thomas Lau Luen-hung, has proposed a HK$1.5 billion financial package to rescue troubled Hong Kong-listed jewellery and watch manufacturer EganaGoldpfeil.

Lifestyle has provided a HK$300 million bridge loan to EganaGoldpfeil and plans use HK$325 million to buy a 29.67 per cent stake and HK$880 million to subscribe to the company's convertible bonds.

The stake, consisting of 434.3 million shares, will be bought from Joint Asset, a firm controlled by EganaGoldpfeil chairman Hans-Joerg Seeberger, at an indicative price of 75 HK cents each. The bonds can be swapped into its shares at between 75 HK cents and HK$1 each.

Joint Asset planned to use the proceeds from the stake sale to pay for EganaGoldpfeil's account receivables, EganaGoldpfeil said. Lifestyle will become its single biggest shareholder after the deal and can appoint three members to the board.

'EganaGoldpfeil's business is doing fine; the problem is with its management,' a Lifestyle spokesman said last night. 'It has many clients with German brands who want to enter the mainland and we would like to arrange that.'

Shares of EganaGoldpfeil last traded at 66 HK cents before trading was suspended on September 11. Trading in Lifestyle shares has been halted since September 25.

EganaGoldpfeil shares have slumped 87.54 per cent since July 26 when shareholder activist David Webb questioned the company's accounting and the Independent Commission Against Corruption charged executive director David Wong Wai-kwong with fraud.