Fong's Industries seeks shareholder OK to redeem 0% convertibles due 2011

By Laura Lutz

Des Moines, April 14 - Fong's Industries Co. Ltd. said it plans to seek stockholder approval of a repurchase mandate, which would allow the company to buy back up to 10% of its HK$800 million of outstanding 0% convertible bonds due 2011.

The company plans to convene a special general meeting on May 2 to seek approval of the mandate.

Buying back the convertibles would allow Fong's to reduce the dilutive effects of potential conversions on shareholders, the company said.

Any repurchases under the mandate would be conducted at the discretion of the company's directors.

No repurchases would be made that would have a material adverse effect on the company's working capital, it said.

The repurchase mandate would expire on the scheduled date of the company's next annual general meeting.

The bonds were originally issued in principal amount of HK$800 million on April 19, 2006. The conversion price was initially HK$8.37 per share, but it was lowered to HK$7.62 on Oct. 26.

Fong's is a textile company based in Hong Kong.

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