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

To: Heretic who wrote (387)	3/20/1998 7:49:00 PM
From: Tom	Read Replies (1) \| Respond to of 457

No. I didn't. But you are correct. I should have read beyond the headline. Here's a clipboard copy of the story and the misleading headline from The Star -- Malaysia. ------------------------------------------------------------------------------------------------------------- ABN-AMRO to buy 75pc in Thai Farmers Bank BANGKOK: Dutch banking giant ABN-AMRO unveiled plans Wednesday to take a stake in a cash-strapped Thai institution, as two other local banks also said they were seeking foreign capital. ABN-AMRO would become only the second foreign bank to buy more than a 49% share in a Thai institution in a move that comes amid a forced liberalisation of the shattered sector. The Dutch bank announced it had signed a letter of intent to take a 75% stake in the medium-sized Bank of Asia, Thailand's third oldest and 11th largest domestic bank. Thai Farmers Bank (TFB), the country's second largest commercial bank, and the troubled Bangkok Bank of Commerce (BBC) also said they were seeking to raise foreign ownership through share issues. The announcements sent jitters through the financial markets, adding to investors' concerns about stock dilution and contributing to a 2.0% slump in the stock market. The banking sector was down 5.53 points at 380.66. Bank of Asia shares were suspended after ABN-AMRO announced it would buy the 75% stake through a share issue. "The (ABN-AMRO) move did not help boost sentiment in the banking sector at all because the process will require some time," a local analyst told AFX-Asia. "The news also made investors wonder about what other banks will do in seeking their foreign partners to buy new shares," the analyst said. Speaking at a press conference in Bangkok, ABN-AMRO's Asia-Pacific chief Tom de Boer said the bank had signed a letter of intent to take a 75% stake in the Bank of Asia plc Ltd (BOA). "Thailand is an important market for us, and we are confident in Thailand's future prospects," he said, adding that a preliminary due diligence report had shown BOA to be in good shape. Based on the letter of intent, which still requires a full due diligence report, ABN-AMRO will inject 7.5 billion baht (US$183mil) into the Thai institution. In exchange, ABN-AMRO will get 1.4 billion new shares representing 75% of the enlarged issue share capital of the bank on a fully diluted basis. The deal is expected to be completed by the end of 1999. The ABN-AMRO/BOA deal comes in the wake of the recent purchase of a controlling interest in Thai Danu Bank plc Ltd (TDB) by the Development Bank of Singapore (DBS). BOA has total assets of 157 billion baht, with paid up capital of 11 billion baht and non-performing loans at 12% at the end of 1997. The bank reported a net loss of 432.5 million baht for the year ending Dec 31, 1997. The new injection from ABN-AMRO will boost BOA's capital adequacy ratio to 14%, well above the level of 8.5% set by the central Bank of Thailand in its sector rehabilitation plans. Thai financial authorities have been fighting tight domestic liquidity by urging local banks to seek to boost their capital bases by attracting foreign partners. Only the deal between TDB and the DBS had so far gone through. TFB said Wednesday that it was seeking to relax rules covering the amount of its shares allowed to be owned by foreigners. In a statement to the Stock Exchange of Thailand, TFB said it wished to amend its articles of association covering the ceiling on foreign ownership from 25% to 49%. The BBC also confirmed on Wednesday that it would be seeking to boost its capital base by undertaking a new share issue. A bank official said BBC would issue 38.5 million new shares, raising its registered capital to 12.16 billion baht from 11.77 billion baht. - AFP