Singaporean group takes control of Eastern Star

Sunrise Properties of Singapore has become the majority share holder in Eastern Star Real Estate Plc in a recent change in the company’s holdings. Eastern Star transferred part of its debt to equity, followed by sales of capital increase shares in July. The Singaporean group now controls 31.86% in the new holding while the Thai group, Star Block, reduced its share portion to 14.4%.

The company now has Baht 1.782 billion in paid-up registered capital, while another Baht 112 million is still to come from selling another 28 million capital-increase shares, said William Cheng, managing director of Eastern Star Real Estate. Negotiations have been under way with US, European and Singaporean investors in a new capital increase plan, Cheng said.

The group is to work out a debt restructuring plan to service the Baht 1.4 billion outstanding debts owed to FRA, local banks and financial institutions.

Meanwhile, the company has put off investment plans in properties for the next 2 years. Income will come from services and leases of living estates.

Solomon Smith Barney to lead Thai Bank sale

The Thai Bank recently appointed Solomon Smith Barney to be its financial advisor in a plan to sell part of the bank to foreign investors. The government-owned bank has been up for sale under a privatization plan, which is yet to be approved by the ministry of finance, said Peerasilp Suppholsiri, president.

The bank, which was formed by combining assets of several crisis-hit banks and finance houses, ordered close by the Bank of Thailand in 1998, will still be 50%-owned by Thai entities, Peerasilp said. A series of road shows have been planned for early next year to provide information to investors overseas, he said. Thai expatriates in foreign countries have been the prime target in the sell-off plan.

The bank recently repaid over Baht 122.2 billion of loans to the Financial Institutions Rehabilitation Fund.

High liquidity in the financial system is seen as a boon in expanding banking services, under the policy to make Thai Bank a leading wholesale bank.

Shin spends Baht 100 million in developing Internet portal site

The Shin Corporation on September 9, 1999, formally launched a portal web site in a Baht 100-million project to build a local web ring for future e-commerce business. The new site, which hosts nine Thai-owned web sites, including the four most popular sites, aims to attract both teen web surfers and working people.

AD Venture Co, a Shin Corp subsidiary that owns and operates the new web ring, will install between 30 to 40 Internet-ready PCs at leading department stores to promote logging on to the new site free of charge. The site will be widely advertised in the media, said Sompob Bramanapitak, business development manager.

Each site is 60%-owned by its developer, while AD Venture will own the rest. The company has invested from Baht 500,000 to Baht 2 million in the incorporated Web sites. The portal web site will go commercial after gaining popularity.

‘ThaiIcq’, which is among the nine incorporated sites, will be developed into a community service site to provide information on the country’s development.

Angel Air asks for more stakes for foreign partners

The country’s second national airline, Angel Airline Co., said it was working out a plan to offer more stakes in the company to foreign strategic partners; a big enough portion, it hopes, to be attractive. The airline, which is to celebrate the first anniversary this month, said it has been running in the red at an average of Baht 20 million a month since its takeoff in September last year.

The airline will soon submit a new share holding structure to the department of aviation for approval, said Vittaya Banditgrisada, a director. The stake for foreign partners, which is currently limited to 15% by law, should be expanded to between 15% and 49%, Vittaya said. Several European and Asian airlines have shown the interest in joining Angel Airline as strategic partners, he said.

The law also limits foreign airlines from holding more than 5% in Thailand’s second national airline company. Most prospective foreign investors, however, want a larger stake in order to participate in administering Angel Air.

The airline hopes to break even in its 5th year of operation.

Convenience store franchisers move to cut rates

Fierce competition in the convenience store market has forced master franchisers to move to bring down both investment capital and admission fees in order to attract new investors. CP Seven Eleven Co. on Thursday, September 9, announced new conditions friendlier to small and medium-sized investors to make it easier to own a 7-Eleven store.

According to industry sources, CP Seven Eleven, franchised here under a license from Taiwan’s Seven Eleven chain, will reduce startup capital about 50%, while the company will provide financial help in the investment. Formerly, a new franchisee would have to pay from Baht 3 million to Baht 4 million to own a 7-Eleven store.

The chain store currently has 1,200 branches nationwide.

An investor pays between Baht 900,000 and Baht 1 million to own a Family Mart store, the much smaller competitor of 7-Eleven. Siam Family Mart Co. said it is considering bringing down its already low franchise fee by nearly one half in a new co-investment program.

This year has witnessed aggressive expansion of local convenience store chains, as with a few million baht in investment a small investor can own a master franchise.

Rumors about cheap Mira cars hit the industry

Rumors hit the market last week that Daihatsu (Thailand) is dumping the price of its mini car, Daihatsu Mira, to Baht 100,000 for three units. The rumor prompted a warning from the company, which said that the rumor was a farce.

There are reports that cars that look like Daihatsu Miras have been spotted in Haadyai, which are probably smuggled units of Kanzil car from Malaysia.

A Daihatsu Mira, powered by .877-liter engine, would cost nearly Baht 200,000 a unit. But the last Mira unit was sold out almost two years ago after the car maker closed the assembly line at Ban Chang General Assembly plant in 1997, said a Daihatsu (Thailand) manager. Even smuggled Kanzil units will not be as low as that claimed in the rumor, the manager said.

Phone inquiries poured into the Ban Chang General Assembly plant over the weekend, and a team was sent to Ayutthaya to probe into reports that cheap Mira units were available at a local car dealer.

The former local maker of the Daihatsu car, Daihatsu-Pranakorn Motors, stopped marketing the car after the crisis in 1997. Japan’s Daihatsu Motors took control over the Thai Daihatsu operation.

Golden Triangle Casino opens

The hotel-cum-casino complex owned by an elite Thai group was quietly opened last month in ‘no man’s land’ in the Golden Triangle, just inside Burma. But only gamblers and fortune seekers with a minimum of Baht 100,000 in their pockets are welcome.

The casino is operated under a license obtained from local Burmese authorities in Ta Chi Lek.

The casino, named the Golden Triangle Paradise Resort, is owned by the Pothsuthon family of a cabinet minister in the Chuan Leekpai administration. The complex is on the opposite side of the Ruak River in Chiang Rai’s Chiang Saen district. It welcomes hundreds of Thai, Lao, Chinese and other foreign visitors each day, said official sources.

Though the company has failed to win government approval to open a border checkpoint there, visitors can reach the site by long-tail boat along the Mekong River. No customs or immigration procedures are needed in traveling along the Mekong, under a tripartite agreement by Thai, Lao and Burmese governments.

Copyright 1998 Pattaya Mail Publishing Co.Ltd.
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Updated by Chinnaporn Sangwanlek.