Moody's may cut Hang Fung Gold

Moody's Investors Service said it put on review for possible downgrade the Ba3 corporate family and senior unsecured ratings of Hang Fung Gold Technology Ltd.

The action is prompted by the technical breach of Hang Fung Gold's loan covenants in relation to the minimum shareholding requirements by the previous chairman, Dr. Lam Sai Wing, who passed away in September, Moody's said.

Depending on the outcome of negotiations to rectify the situation, the breach may trigger cross default provision in the company's other borrowings, including in the $170 million bonds due in 2014, the agency added.

Moody's said it will closely monitor the negotiation process in relation to the covenant breach.

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