Nice assets, shame about the cashflow

The structure of First Pacific''s debut high yield bond breaks new ground, but is risky for its controlling shareholder.

No one could accuse First Pacific of having a dull credit story. The Hong Kong based conglomerate has a negative net cashflow, and last year underwent a public spat between its executive chairman and its controlling shareholder.

An attempt to sell one of its key assets was blocked by its own executive chairman, even though this would have raised enough cash to refinance the company's debt. As a result of the debacle the company's longstanding CFO and legal counsel and company secretary - both of whom were board members - recently resigned.

Adding to the Salim controlled company's problems, by year end the company has to repay about $100 million of...

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