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Reuters: Vincent Tan Revamps Berjaya
By Wong Choon Mei

24/5/2001 9:43 pm Thu

[Ramai orang takut Berjaya sebenarnya tidak berjaya kerana ia cuma berjaya menipu semua..... lihatlah hutang-hutangnya yang sudah mencecah berbilion sehingga Danaharta pula datang menyelamatkannya sedangkan ia tidak layak dibantu sebenarnya. Tetapi di Malaysia semuanya boleh sahaja asalkan ada wangnya untuk si dia yang telah tua......
- Editor

Malaysia's Vincent Tan revamps Berjaya

By Wong Choon Mei

KUALA LUMPUR (Reuters) - Malaysian tycoon Vincent Tan pledged on Wednesday to pump $358 million of personal assets into his flagship Berjaya Group in a bid to revive an empire sickened by the stuttering economy and property market.

"I am sacrificing a lot," Tan said in a statement announcing debt restructuring plans for Berjaya Group and some of its listed units.

The plan will help recapitalise Berjaya Group's capital base via an addition of about 2.6 billion ringgit ($684 million) in equity and quasi-equity, a separate Berjaya Group statement said.

The company promised to cut group bank borrowings by 900 million ringgit and rejuvenate its income stream with the prospects of a profit turnaround by 2003.

Berjaya posted a net loss of 302.88 million ringgit for the nine months to January 31, up from a loss of 290.78 million.

The Tan-controlled group said the wide-ranging measures would also help resolve "inter-company balances" with two of its units.

Tan's success story began when he won the McDonald's Malaysia franchise 20 years ago.

Politically connected, gambling businesses have been the bedrock of his empire. After leisure and healthcare, he branched into telecoms via Mutiara Swisscom, now renamed Digi.Com.

The 49-year-old Tan's ambitious, aggressive style of business has contrasted with the more conservative ways of Malaysia's older established Chinese business tycoons.

That approach saw Berjaya become one of the high-profile Malaysian conglomerates thumped by Asia's 1997-1998 financial crisis.

Much of its losses came from write-offs in its investments, especially in developing lottery activities overseas.

A who's who of Asia's top 100 billionaires, "Asia's New Wealth Club", written by Geoff Hisc##k, put Tan as Malaysia's fourth richest individual and among Asia's top 50 based on a market capitalisation of some $2 billion as of June 30 last year.

But a Malaysian Business study released in February excluded him from its wealth list because it could not determine the extent of his direct or indirect liabilities.


When the plan concludes, Tan's flagship Berjaya Group will stop operations and be delisted.

A new company, Newco, will be formed to take all of Berjaya Group's assets and liabilities, including its listing status.

Existing Berjaya Group shareholders, including loan stock and warrant holders, will be asked to swap their stakes into Newco.

"We don't know yet what the Newco will be named, but it will be Berjaya something," executive director of Berjaya Group Freddie Pang told reporters.

To add value to the Newco, Tan will inject personal assets including a 20 percent stake in DiGi.Com and all of privately held commercial property developer Berjaya Times Square Sdn Bhd, worth a total of 1.36 billion ringgit.

Tan, to be paid in Newco shares, will see his 34 percent stake in Berjaya Group rise to 66 percent in the Newco.

With additional assets in hand, Newco hopes to issue about 300 million ringgit worth of shares and 600 million ringgit of loan stocks mainly to repay bank loans and settle debts owed to stablemates.

Berjaya Group will also buy out minority shareholders in 64 percent owned Berjaya Capital and 71 percent owned Cosway Corp , offering in exchange shares in 68 percent-owned unit Berjaya Land .

This will allow Berjaya Group to take both Berjaya Capital and Cosway private, an indirect way of resolving 1.54 billion ringgit of debt owed to the two units.

Berjaya Group owes 1.26 billion ringgit to Berjaya Capital, 1.27 billion to Berjaya Land and 283 million ringgit to Cosway.

To sweeten the deal for Berjaya Land shareholders three small subsidiaries will be sold to the firm by Berjaya Group.

Berjaya Land will also issue bonus shares.

"At the end of the exercise, the only inter-company loan unresolved will be the amount owing to Berjaya Land," Pang said.