The parent company of Hong Kong’s iconic Hong Kong Travel Services decided to liquidate the travel agency on Friday, citing its negative net asset value of more than 68 million Chinese yuan reported in late June.
The liquidation came just days after the travel agency closed its six branches in the city “to minimize costs and preserve strength until the borders fully reopen”.
The move was disclosed by its Shenzhen-listed parent company, Caissa Tosun Development Co Ltd (000796), in a notice submitted to the Shenzhen Stock Exchange today. Caissa Tosun added in the notice that the move was approved by the board on Thursday.
Caissa Tosun explained the reasons for the liquidation that Hong Thai’s profits have declined, as the majority of its tourism business in Guangdong, Hong Kong and Macao are heavily affected by Covid-19.
The travel agency “demonstrably lacks the capacity to settle its debts,” the notice said.
According to figures released by Caissa Tosun, Hong Thai’s total assets stood at 14.32 million yuan at the end of last year, with a negative net worth of 63.62 million yuan. The travel agency also recorded a negative net profit of 79.54 million yuan in 2021.
At the end of June this year, Hong Thai’s total assets fell 93% to 972,700 yuan, with a negative net worth of 68.13 million yuan.
Therefore, Caissa Tosun decided to initiate liquidation proceedings for Hong Thai “in order to fairly manage debts and legal obligations and to protect the legal rights of the company, shareholders and creditors”.
Gianna Hsu Wong Mei-lun, chairwoman of the Hong Kong Travel Industry Council, said customers who purchased packages in Hong Thai can apply for a 90% refund.
She continued that the “0+3” measure only boosted about 10% of businesses and that more branches could be closed if the situation remains unchanged.
Lam Chi-ting, executive director of the General Union of Tourism Industry Employees of Hong Kong, said if Hong Thai is liquidated because it fails to settle its debts, workers can apply for the Protection Fund. wages in the event of insolvency.
On the other hand, EGL Tours said on Facebook that they were heartbroken to hear the news and were ready to prioritize applications from Hong Thai employees to keep talent in the tourism industry. tourism. EGL explained that one of the founders worked for Hong Thai and hoped to repay the former boss.
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