Lai Sun Development
| Company type | Public |
|---|---|
| Industry | Property development |
| Founded | 1987 |
| Founder | Lim Por-yen |
| Headquarters | Hong Kong , Hong Kong |
Key people | Peter Lam Kin Ngok (Chairman) |
| Parent | Lai Sun Garment |
Lai Sun Development ("LSD") is a Hong Kong property developer that is publicly traded on the Hong Kong Stock Exchange. Established in 1987 by textile industry leader Lim Por-yen, the company remains under the control of Lai Sun Garment ("LSG"), a firm founded in 1947 and also listed on the Hong Kong Stock Exchange.
The enterprise is currently overseen by Peter Lam Kin Ngok, the founder's son, who additionally directs the Media Asia Entertainment Group.
1997 financial crisis
During Peter Lam's leadership, Lai Sun Development acquired Furama Hotel Enterprises for HK$7 billion in June 1997. This transaction involved purchasing a 45.42% share at HK$3.13 billion, followed by a general offer for the remaining shares, culminating in a total expenditure of HK$6.893 billion. LSD intended to combine the Furama site with the neighboring Ritz Carlton property to develop a premium office tower. However, the onset of the Asian financial crisis significantly affected the company, necessitating asset disposals.
To finance this acquisition at market peak, the group took on substantial debt, including HK$5 billion in bank loans and over HK$2 billion through bonds. The market value subsequently dropped by half, placing LSD in financial distress. Restructuring efforts commenced in 2000. In March of that year, LSD agreed to sell a 65% interest in Furama to a joint venture formed by Pidemco (under Temasek Holdings) and AIG for HK$1.88 billion. The hotel continued operations under an annual lease agreement of HK$145 million until redevelopment plans proceeded. The Furama ceased operations in November 2001 and was demolished the following month.
LSD collaborated with CapitaLand and AIG to establish Bayshore Development Group, which developed AIG Tower—a commercial office building comprising 39 floors and approximately 450,000 square feet (41,800 m²) of gross floor area. Ownership was split with AIG and CapitaLand each holding 35%, while Lai Sun retained a 30% stake.
In order to lower its debt burden—which still exceeded HK$6 billion as of September 2002—LSD divested its 32.75% holding in Asia Television (ATV) to CEO Chan Wing-kee for HK$360 million.
Ritz Carlton plot
The Ritz Carlton land was owned by Diamond String, a company 76.57% controlled by LSD. In November 2007, China Construction Bank (CCB) purchased a 40% interest for HK$1.37 billion, reducing LSD’s ownership to 60%. The redevelopment plan envisions transforming the site into an office tower set for completion in 2011, with CCB occupying part of the building. The hotel ceased operations on 1 January 2008 and has since been repurposed as one of Hong Kong’s largest advertising billboards.