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Danaharta Rescues Vincent Tan - Berjaya Resructuring
By Ganesh Sahathevan
24/5/2001 9:12 pm Thu
[Rakyat sekali lagi menanggung hutang kroni melalui Danaharta.
Ketidaktelusan Danaharta menyebabkan beberapa muslihat dirancang
The Berjaya restructuring reported in the Edge (see
http://www.theedge.com.my/article.cfm?id=4635) assumes that
Vincent Tan owns 34% of BGroup-but it is not true that 11.5
percentage points is held by the Taxpayer, via Danaharta.
The story also talks of a capital raising (I think) of RM
2.6 billion or a RM 156 million rights issue-taking the
lower figure and given that Vincent is supposed to own 66%
of the NEWCO in which rights will be issued - will Vincent
clarify how he proposes to raise RM104 million, when his
shares in Digi and BGroup are held by Danaharta, or in
pledged securites accounts?
The evidence is to be found at page 171 of The Berjaya Group
Annual Report 2000, signed by executive chairman Vincent
A further 8.3 percentage points of Tan's 35% holding in
BGroup are held as pledged securities by variuos nominee
Vincent is said to control 35% of BGroup's stock.
Given the above, just over 20 percentage points of that
holding is in the hands of the banks.
Another 5% or so held via companies Vincent is said to
control, B&B Enterprises and Lengkap Bahagia is similliarly
The shareholdings are as at 18 September 2000. Since then,
Berjaya shares have fallen in value, and presently trade at
around 30 sen.
Danaharta Urus is obviously holding the shares as a result of
having assumed both a non-performing loan/s and the
collateral. However, given Danaharta secrecy, the loan
amount cannot be confirmed.
It is however on public record that Danaharta had assumed
somewhere between RM 20-60 million, borrowed by Vincent's
Sun Media Group S/B. Evidence can be found in the Gemtech
Bhd announcement to the KLSE on its proposed acquisition of
Sun Media. Vincent owns 60% of Sun Media, while Berjaya Group
and BToto own another 25%.
The Edge has reported (see http://www.theedge.com.my/article.cfm?id=4635)
that the entire Berjaya Group will be placed under s.176 protection to allow
time for the restructuring it has announced to take place.
The gist of s.176 of the Companies Act is provided below-strange requirement
for a company that need not comply with the KLSE's requirements for
companies in financial difficulty-eventhough it and its major sharehoolder
have been subject to Danaharta intrusion, or assistance-one can never tell
Schemes of Arrangement: Section 176(1) states as follows:-
Where a compromise or arrangement is proposed between a company and its
creditors or any class of them or between the company and its members or any
class of them the Court may on the application in a summary way of the
company, or of any creditor or member of the company, or in the case of a
company being wound up of the liquidator, order a meeting of the creditors
or class of creditors or of the members of the company or class of members
to be summoned in such manner as the Court directs.
In essence, section 176(1) provides for schemes of arrangement to be binding
on creditors and members alike after the requisite approval by the specified
majority and upon confirmation by the Court. Schemes of arrangement may be
used for a variety of purposes and one purpose for which it is used for,
with growing popularity, is the reconstruction of the financial affairs of a
company heavily burdened with debt. It is essentially a formal compromise of
a company's debts where there is a possibility of its business being
A KLSE announcement dated 26/10/99 by Berjaya Capital said that Danaharta
had disposed of shares beneficially held for Berjaya Group.
This suggests that Berjaya Group's shares in its subsidiary Berjaya Capital
are or were held, in part or in its entirety, by Danaharta. It also
suggests that Berjaya Group was/is unable to service its loans.
Yet another instance of Danaharta assistance to billionaire tycoon Vincent
Tan (see attached)
Danaharta is likely to see further deterioration in the value of the 45
million or so Digi shares it holds as collateral for NPLs suffered by Digi
executive chairman Vincent Tan. (see story attached)
Digi may need to write-off RM 98.98 million which it booked as an
exceptional item in the financial year ended 30 April 1999. The financial
statements for the year ended 30 April 2000, state at Note 19, that the
amount represents " the charge-out during the previous year of the
subsidary's deffered expenditure, which had existed at the acquisition date,
in respect of terminated subscribers as these were no longer recoverable."
Despite this, that amount was booked via Digi's 1999 P&L as an exceptional
item, reducing its loss for the year to RM 77 million. The amount remains on
the books as a reserve on consolidation.
In the event that Digi chooses not to write-of that amount, investors are
likely to value the company less, regardless of how Digi chooses to classify
or reclassify debts gone bad.
Danaharta Urus S/B , a wholly-owned subsidiary of Danaharta holds 45 million
Digi.com shares (6.0% of issued shares) on behalf of Vincent Tan Chee Yiuon.
It appears that but for Danaharta's intervention, Vincent may have, as a
result of a forced sale of those shares, lost control of Digi to his partner
in the company, Telenor.
A further 6.2 percentage points is held as pledged securities by various
Another 6.6% or so held via Vincent's Berjaya VTCY is also pledged to
various financial institutions.
Vincent is reported as having direct control over approximately 11.97% of
Digi stock.A further 21% is controlled indirectly.
Telenor, his partner in Digi, controls 33%.
Had the 6% held by Danaharta been sold to recover the loans Vincent cannot
service, Vincent would have lost control to Telenor.
The shareholdings are as at 8 August 2000. Since then, Berjaya shares have
fallen in value, and presently trade at around RM 5.
Danaharta Urus has also intervened on Vincent's behalf to take control of
11.5% in Berjaya Group Bhd.
Danaharta Urus is obviusly holding the shares as a result of having assumed
both a non-performing loan/s and the collateral. However, given Danaharta
secrecy, the loan amount cannot be confirmed.
It is however on public record that Danaharta had assumed somewhere between
RM 20-60 million, borrowed by Vincent's Sun Media Group S/B.
Evidence can be found in the Gemtech Bhd announcement to the KLSE on its
proposed acquisition of Sun Media. Vincent owns 60% of Sun Media, while
Berjaya Group and BToto own another 25%.
Berjaya Group undertakes billion ringgit revamp plan
By Sidek Kamiso, 1.10pm
Berjaya Group is undertaking a multi-billion ringgit
restructuring exercise involving the transfer of its
listing status to Newco, the delisting of Cosway
Corporation Bhd (CCB) and Berjaya Capital Bhd and the
takeover of the RM2.8 billion property project Berjaya Times
The move is seen as streamlining the group's structure,
addressing its high gearing and facilitating the transfer of
assets between individuals and at the group level.
In the exercise, BGroup will transfer Berjaya General
Insurance Bhd, Inter-Pacific Capital Sdn Bhd and Cosway
Malaysia Sdn Bhd to Berjaya Land Bhd for RM752.3 million.
The scheme also sees Tan Sri Vincent Tan Chee Yioun offering
for sale a 20 per cent stake in DiGi.com Bhd comprising 150
million shares for RM975 million or RM6.50 a share to be
satisfied by 886.4 million Newco shares at RM1.10 each with
443.2 million Newco warrants.
The other proposals in the exercise include rights issues,
payment of loans and putting the entire BGroup under Section
176 of the Companies Act, 1965 to allow them time to
undertake the restructuring exercise.
Announcing the exercise on May 23, the group's adviser,
Commerce International Merchant Bankers Bhd said the revamp
involved the transfer of BGroup's listing to Newco, the
takeover of Berjaya Times Square Sdn Bhd, which owns the
RM1.9 billion Times Square project, and the delisting of CCB
'The exercise is expected to recapitalise the group by an
additional RM2.6 billion in equity and quasi equity and to
reduce bank borrowings by about RM900 million,' the statement
It added that the group intended to rejuvenate its income
stream with the prospect of a turnaround in the financial
year ending April 30, 2003.
Under the BGroup member scheme, its entire securities
comprising shares, ICULS and warrants would be exchanged for
new shares and ICULS of the newly incorporated company.
The swap arrangement would be on the basis of four BGroup
shares to one Newco share; two BGroup ICULS to one Newco
ICULS; and 10 BGroup warrants for one Newco warrant.
Newco also proposed the implementation of a renounceable
rights issue of RM561.1 million nominal value of Newco 20 sen
ICULS on the basis of ten 20 sen ICULS for every three
existing Newco shares or Newco RM1 ICULS.
BLand, which proposed a two-for-three bonus issue, is also
making separate general offers to acquire the remaining
shares of BCap and CCB not held by BGroup for RM684.4 million
to be satisfied by share swap. It will eventually sell its
entire interest in BCap and CCB to Newco for the same price.
BCap and CCB will declare special gross cash dividend of 35
sen each subject to their respective delisting exercise.