XN000022-1988-04-27 — Page 15

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WEDNESDAY, APRIL 27, 1988

"LAST YEAR THE CORPORATION'S AGGREGATE DEBT REDUCED BY MILLION TO $18,179 MILLION.

$1,000

"HOWEVER, INTEREST AND FINANCE COSTS FOR THE YEAR AT $1,400 MILLION WERE LITTLE CHANGED FROM THE PREVIOUS YEAR, HE SAID.

די

"THE RECEIPT OF PROPERTY DEVELOPMENT PROFITS OF $720 MILLION FOLLOWED THE SUCCESSFUL COMPLETION OF SEVERAL JOINT VENTURES, INCLUDING THAT OF THE KORNHILL DEVELOPMENT AT QUARRY BAY."

HE CAUTIONED THAT WHILST PROPERTY DEVELOPMENT PROFITS HAD BEEN AN IMPORTANT SOURCE OF FUNDS FOR THE CORPORATION, THEY WERE NOT A SECURE FORM OF RECURRENT REVENUE.

"THEY CONTINUE, HOWEVER, TO MAKE A VERY USEFUL CONTRIBUTION THE CORPORATION'S FINANCIAL POSITION.

LOSS

FOR

TO

NOTING THAT THE CORPORATION'S NET

1987 WAS SIGNIFICANTLY REDUCED TO $78 MILLION COMPARED WITH $470 MILLION IN 1986, MR JACOBS SAID THE CORPORATION'S PROJECTIONS LOOKED FORWARD ΤΟ A GROWTH IN OPERATING PROFITS WELL ON SCHEDULE TO COVER INTEREST COSTS IN THE EARLY NINETIES AND THEREAFTER TO RETIRE PROGRESSIVELY THE CORPORATION'S DEBT.

"BUT EVEN WITH A REDUCING DEBT, AN ACTIVE FINANCING PROGRAMME WAS NECESSARY DURING 1987, MAINLY TO REFINANCE MATURING AND EXISTING FACILITIES AT LOWER COST AND FOR LONGER PERIODS.

SUCCESS IN

"THIS WAS MATERIALLY ASSISTED BY THE CORPORATION'S OBTAINING VERY FAVOURABLE CREDIT RATINGS FROM INTERNATIONAL RATING AGENCIES.

"THESE RATINGS ARE IMPORTANT, BOTH FOR THE CORPORATION AND FOR HONG KONG, IN DEMONSTRATING THE INTERNATIONAL FINANCIAL COMMUNITY'S CONFIDENCE IN THE CORPORATION AND ITS ECONOMIC WELL BEING AS A PRINCIPAL PUBLIC TRANSPORT OPERATOR IN HONG KONG,' HE ADDED.

"FOLLOWING THE EXECUTIVE COUNCIL'S AGREEMENT ΤΟ INCREASE THE CORPORATION'S AUTHORISED SHARE CAPITAL BY THE ISSUE OF SHARES WITH A NOMINAL VALUE OF $5,000 MILLION IN PARTLY PAID FORM, $1,500 MILLION WAS PAID IN DECEMBER 1985 AND THE SECOND TRANCHE OF $1,000 MILLION MARCH 31, 1988, IN ACCORDANCE WITH FINANCE COMMITTEE'S APPROVAL.

ON

"ON THE BASIS OF CURRENT FORECASTS, BOTH THE BOARD OF THE CORPORATION AND I HOPE THAT IT WILL NOT BE NECESSARY ΤΟ REQUEST FINANCE COMMITTEE TO APPROVE PAYMENT OF THE REMAINING $2,500 MILLION," HE NOTED.

ON FUTURE PLANNING, MR JACOBS SAID THE CORPORATION WAS ALSO CONSIDERING PROPOSALS FOR A POSSIBLE EXTENSION TO JUNK BAY NEW TOWN.

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