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WEDNESDAY, MAY 26, 1976
TURNING TO THE FINANCIAL POSITION OF THE COMPANY, HE RECALLED THAT THE COMMISSION HAD LAID CONSIDERABLE STRESS ON THE ROLE OF SHAREHOLDERS IN PROVIDING MORE CAPITAL TO REDUCE THE COMPANY'S HEAVY DEPENDENCE ON BORROWINGS.
AFTER DISCUSSIONS WITH THE GOVERNMENT, THE COMPANY ANNOUNCED IN MARCH THAT IT INTENDED TO RAISE $158 MILLION THROUGH A RIGHTS ISSUE. +THIS ISSUE HAS NOW BEEN MADE AND I UNDERSTAND THAT ALL THE NEW SHARES HAVE BEEN TAKEN UP.
+THE PROCEEDS OF THE ISSUE WILL ENABLE THE COMPANY TO REDEEM AN EQUIVALENT AMOUNT OF BORROWINGS AND THUS TO STRENGTHEN ITS FINANCIAL POSITION.+
APART FROM THIS, HE SAID THE COMPANY'S FINANCIAL POSITION HAD IMPROVED OVER THE PAST YEAR, PARTLY DUE TO A HIGHER DEMAND FOR NEW TELEPHONE INSTALLATIONS WITH RECOVERY OF THE ECONOMY.
HE SAID THE CURRENT FORECAST FOR 1976 ANTICIPATED THAT THE PERCENTAGE RETURN ON SHAREHOLDERS' FUNDS, AS INCREASED BY THE RIGHTS ISSUE, WOULD REMAIN ROUGHLY CONSTANT AT ABOUT 14.3 PER CENT.
+THE RATIO OF SHAREHOLDERS' FUNDS TO BORROWINGS WILL ON THE OTHER HAND, SIGNIFICANTLY IMPROVE. IT IS EXPECTED THAT, BY THE END OF THIS YEAR, BORROWINGS WILL HAVE FALLEN TO APPROXIMATELY $350 MILLION, LEAVING A RATIO OF SHAREHOLDERS' FUNDS TO BORROWINGS OF APPROXIMATELY 70:30, OR ROUGHLY IN LINE WITH THE RATIO RECOMMENDED BY THE COMMISSION OF INQUIRY,+ HE SAID.
FINALLY, MR. JONES SAID THE TELEPHONE COMPANY ITSELF HAD BEEN IMPLEMENTING CERTAIN OF THE RECOMMENDATIONS OF THE COMMISSION PERTAINING TO ITS OWN AFFAIRS.
THIS INCLUDED THE APPOINTMENT OF THE GENERAL MANAGER TO ITS BOARD OF DIRECTORS, AND THE CREATION OF THREE NEW SENIOR POSTS AT ASSISTANT GENERAL MANAGER LEVEL TO COVER, RESPECTIVELY, FINANCE, ENGINEERING POLICY AND DIRECTION, AND ADMINISTRATION.
+AS A RESULT OF THESE EFFORTS,+ MR. JONES ADDED, +1 BELIEVE THAT THE GOVERNMENT AND THE TELEPHONE COMAPNY HAVE CO-OPERATED MORE FRUITFULLY THAN AT ANY TIME IN THE PAST.+
NOTE TO EDITOS:
A PAPER SETTING OUT THE PRINCIPLES UNDERLYING THE SCHEME OF CONTROL OF THE HONG KONG TELEPHONE COMPANY ARE DISTRIBUTED SEPARATELY IN G.I.S. PRESS BOXES.
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