Hong Kong's Fong's Industries buys back HK$5 million 0% convertibles

By Susanna Moon

Chicago, May 8 - Fong's Industries Co. Ltd. said it repurchased HK$5 million of outstanding zero-coupon convertible bonds due 2011.

The company said on April 14 that it sought 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.

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, 2007.

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

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