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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (2605)	3/11/1998 3:53:00 PM
From: Jyoti sharma	Read Replies (1) \| Respond to of 9980

Mohan, SIDBY's trading has been halted on KLSE pending this news. We will know tomorrow if it trades. KLSE closing prices are available on WSJ interactive. There is very good interview with Former PM Lee Kuan Yew of Singapore in the Forbes. He has summarized SEA problems and solution. forbes.com Jyoti

To: Mohan Marette who wrote (2605)	3/11/1998 5:49:00 PM
From: Stitch	Read Replies (2) \| Respond to of 9980

Mohan, As I mentioned on the Asia-Investment Ideas thread I like SIDBY AFTER the divestiture of their bank AND brokerage. But I want to see the market valuation and the deal before I buy. So far there has been an agreement in principle and that is all. IMO there is no hurry on this investment. For one thing, SIDBY is a "Asian recovery" play and that is still a ways off. For another, we need to see what SIDBY gets out of this deal. Finally, SIDBY is still suspended, as of today. Here is an article re: the deal. Star Malaysia- March 11, 1998 Sime Bank acquisition is no bailout, analysts say By Yati Yassin & Jeffri Rafiee KUALA LUMPUR, March 11 -- The proposed acquisition of Sime Bank Bhd by Rashid Hussain Bhd (RHB) for RM852.24 million is not a bailout for the ailing bank as perceived by some critics. "It is a deal between two private entities," said an investment analyst when asked to comment on RHB's announcement late yesterday that it has struck an agreement with Sime Darby Bhd and KUB Malaysia Bhd. Sime Darby and KUB, together own 90.36 per cent of the direct capital of Sime Bank. "It is a straight-cut deal because Sime Darby has the intention to sell its stake in Sime Bank to whoever party," said a research manager in a local stockbrokerage. "It is a bailout if they (Sime Darby) still want stake in the bank and only want management change," he added. When asked on whether the price tag for Sime Bank was fair, he said: "There is no indication of price." The RM852.24 million was the total sales for the 100 per cent for the bank, he said, adding that with an issued share capital of 500 million shares in Sime Bank, the price of one share would be about RM1.25 per share. However, the analysts said investors were worried on how RHB would fund the acquisition. "Investors will be afraid if RHB issues new shares to raise the necessary cash," one of them said.RHB might also issue other instruments to raise cash, said another. Some also suggested that the Employees' Provident Fund is expected to lend a hand to RHB to fund the acquisition and the capital injection that might be needed. Without RHB acquiring Sime Bank and merge the bank with RHB Bank Bhd, Sime Bank, which suffered a loss of RM1.8 billion for the half year ended Dec 31, 1997, needs RM1.2 billion in fresh capital to stay afloat. Another analyst said if the EPF comes into the picture by extending aid to RHB through terms favourable to RHB, the acquisition would be seen as a kind of a bailout. He cited the proposal by Malaysian International Shipping Corporation Bhd's (MISC) proposed acquisition of Konsortium Perkapalan Bhd's (KPB) shipping companies and assets as an example. He said the deal between MISC and KPB was a private sector deal that makes sense, but since MISC is controlled by the national oil company Petroliam Nasional Bhd, the deal could be seen as a bailout for the debt-ridden KPB. RHB in its statement late yesterday said it would unveil details of the funding for the acquisition and recapitalisation of Sime Bank by the end of next week. The research manager said it made sense for RHB not to buy the whole of Sime Bank Group but only the commercial banking operation. Others like the securities, insurance and overseas operations would be sold off, he said. He said RHB might only have to pump in another RM700 million into the merged entity instead of RM1.2 billion required by Sime Bank to stay afloat before the proposed merger. Analysts generally agreed that the merger between Sime Bank and RHB's banking arm, RHB Bank,would create a better capitalised, bigger and stronger bank in line with the current government policy of encouraging mergers of banking institutions. If the acquisition was realised, the merged RHB Bank would become the second largest bank in Malaysia with assets in excess of RM56 billion. It would also have branches in excess of 200 throughout the country as well as presence in Singapore, Thailand and Brunei. -- Bernama