HONG KONG: Gome Electrical Appliances Holdings Ltd, the second-biggest electronics retailer by market value on the mainland, repurchased 1.33 billion yuan ($195 million) of convertible bonds.

The purchased bonds, which mature in 2014, will be canceled once they are settled September 29, the Hong Kong-based company said Friday in a statement. The principal amount of convertible bonds outstanding after the buyback will be 3.27 billion yuan.

The retailer on Wednesday said it sold 2.05 billion yuan ($300 million) of five-year, 3 percent convertible bonds to help refinance debt and boost capital. Gome has 4.6 billion yuan of zero-coupon convertible bonds due May 2014 that bondholders can ask the company to redeem in May next year, according to data compiled by Bloomberg.

Gome dropped 0.5 percent to close at HK$2.05 in Hong Kong trading. The stock has more than doubled since resuming trading June 23 following a seven-month suspension after billionaire Huang Guangyu, former chairman and the biggest shareholder, was detained by Beijing police.

The retailer's profit fell 50 percent in the first half to 580 million yuan, missing the 733.3 million yuan average estimate of three analysts.

The company had in June announced plans to raise $431 million to help finance new stores, revamp existing outlets and pay debt. It raised 1.59 billion yuan in June from a sale of 5 percent convertible notes.

Gome had 779 stores as of June 30, 9 percent fewer than a year earlier. Huang, the second-richest man on the mainland, has been accused by Hong Kong's securities regulator of committing stock market fraud early last year. He was detained by Beijing police in November for "economic crimes" and hasn't made a public statement or appearance since. He resigned as Gome's chairman in January.

The Hong Kong court on September 8 upheld an earlier decision to freeze about HK$1.66 billion ($214 million) of assets held by Huang, his wife Du Juan, and two companies he owns, Shinning Crown Holdings Inc and Shine Group Ltd. Of these assets, about 779 million shares of Gome owned by Shining Crown and Shine Group are held by the court.

Bloomberg News

(HK Edition 09/26/2009 page2)