Vincent Tan incurs RM800 m paper loss

The Business Times, Singapore
05 January 2006


Vincent Tan incurs RM800 m paper loss

Overhang contributed to Berjaya Corp's price dive

By PAULINE NG
Business Times

MALAYSIAN tycoon Vincent Tan is sitting on a paper loss of nearly
RM800 million, arising mainly from the massive overhang of loan
stocks issued by his conglomerate Berjaya Corporation.

But yesterday he played down the sell-down in the loan stocks on
concerns that the restructured company would not perform. He even
said that as others were selling, he was buying - having purchased an
additional 60 million of BCorp loan stock on the open market on Tuesday.

As part of the corporate restructuring of the conglomerate, Mr Tan
invested RM203.5 million cash for BCorp's rights issue to subscribe
for 407 million BCorp irredeemable convertible unsecured loan stocks
(Iculs).

He had also injected his 85 per cent-controlled company Bukit Tinggi
Resort into BCorp for 684.7 million BCorp shares.

Following the restructuring, Mr Tan owns 68 per cent of BCorp's 1.23
billion shares.

BCorp and its subsidiaries own 47 per cent of the 9.8 billion Iculs
that were issued by BCorp in the restructuring exercise, while Mr Tan
also holds a direct 8 per cent of the Iculs.

In a statement yesterday, the company said the public portion of 2.97
billion BCorp Iculs mainly arose from the capital repayment, special
dividend-in-specie exercises by its units Berjaya Land and Berjaya
Capital.

'It is to be expected that a great number of these 54,000 Iculs
holders will take the opportunity to realise their BCorp Iculs (which
they received free of charge) upon listing, and this has thus created
an 'overhang' situation which contributed to the sharp decline in the
market prices of the BCorp securities upon its maiden listing on
Bursa Malaysia Securities Berhad on Jan 3,' the statement said.

Upon its listing, BCorp opened at 20 sen, 80 sen lower than its
reference price.

Its 50 sen nominal amount Iculs were massively traded and ended the
day at six sen. There was little change to the share price of the
securities yesterday.

The company said that, based on yesterday's closing prices of BCorp
shares and Iculs of 18.5 sen per and six sen respectively, Mr Tan
would have a total book loss of close to RM800 million.

Mr Tan himself said: 'I am confident that given the stronger footing
and the future growth prospects of the BCorp Group, my investment
will do well in the future. I'm not overly concerned about the
current prices of the shares and Iculs. As a matter of fact, I have
purchased additional 60 million BCorp Iculs from the open market
yesterday to reiterate my confidence and firm commitment in the
company and the group.'