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Thai Dev.Cap.Fund (THD)

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Thursday 21 December, 2000

Thai Dev.Cap.Fund

Interim Results

Thai Development Capital Fund Ld
21 December 2000



                  The Thai Development Capital Fund Limited
                  -----------------------------------------
                                      
                   Announcement of Results for the 6 month
                      Period Ending 30th September 2000
                  ----------------------------------------
    
    
The directors of the Thai Development Capital Fund Limited announce the results
of the company for the six month period to, and as at, 30th September 2000.
   
The Net Asset Value at 30th September 2000 was US$2.038 million or US$1.16 per
share. During the period, the portfolio was further reduced by the sale of
investments. The Baht weakened throughout the period, falling against the US
Dollar by 11.5% from Baht 37.86 at 31 March to Baht 42.225 at 30 September 2000.
The movement in the Thai currency has more than contributed to the decline in
the Company's net asset value in the period.
   
At 30th September 2000, the company's assets comprised the following:
   
        Net cash and liquid assets                   US$0.16m
        Investments, net of provisions               US$1.89m
        Total net assets                             US$2.04m
   
        Issued, paid up shares                       1,754,500
   
        Net Assets per share                         US$1.16 per share
   
   
Further to resolutions passed at the company's Annual General Meeting held in
October, the company's investments are being liquidated so that the capital thus
released can be returned to shareholders. The disposal process is continuing
under the control of the directors, and is expected to be largely completed
within the first quarter of 2001.
   
   
Further information is contained in the attached unaudited interim report at
30th September 2000.
   
   
   
Christopher S. Forbes
22 December 2000
   
   
   
                              Directors' Review
                              -----------------
   
The unaudited Interim Report of the Thai Development Capital Fund Limited for
the six-month period ended 30 September 2000 is as follows.
    
Performance
    
The most recent period has been one of continuing difficulty, during which the
Company has continued to divest its holdings. After the further return of
capital to shareholders of US$1.20 per share in January 2000, new investment
activity was curtailed, and interest-earning capability reduced. Total net
assets at 30th September 2000 amounted to US$2.035 million or US$1.16 per share.
    
During the 6 month period to 30th September 2000 the loss per share was US$0.09,
resulting mainly from the decline in the exchange rate over the period (see
below). Operating costs of the Company were further reduced, and the
Representative Office in Bangkok formally closed in September.  Mr. Lean
continues to oversee the disposal of investments on a part-time basis. The Baht
weakened throughout the period, falling by 11.5% against the US Dollar from Baht
37.86 at 31 March to Baht 42.225 at 30 September 2000.
    
The Directors maintained their cautious approach in valuing the portfolio, which
continues to reflect the difficulties of divesting from some investments in the
short term.
    
Thailand's Economy
    
Thailand's economic recovery remains elusive. While certain sectors are
performing strongly, notably exports, assisted by a weaker currency, the overall
business climate remains precarious. The reform initiatives appear to have
ground to a halt, and the forthcoming elections have resulted in the usual
political paralysis. Interest rates remained low, but failed to stimulate much
new investment. As a result the market for disposals was difficult, especially
for the smaller companies in TDCF's portfolio. Foreign investors remained
cautious about Thailand, witnessed by the stagnation of the Stock Exchange. The
restructuring of TPI has been given prominence in the international press, which
has not helped overall opinion regarding the ultimate success of the overall
restructuring and reform process. The banking sector remains a problem, with the
lack of credit facilities for smaller companies, mentioned consistently in these
reports, has continued to have an adverse effect.  The forthcoming election has
created further uncertainty about the country's economic prospects, and 2001 is
likely to be another difficult year.
    
The future
    
As soon as further divestments can be made, another return of capital will be
made to shareholders.  The timing of and amount of realisations that will be
made thereafter from the unlisted investments, including the amount, if any,
that might be gained from the non-performing investments, is difficult to
predict. The most likely exit route for the Company's investments remains either
their sale to other financial investors, or to companies in the relevant
sectors.  An alternative option for the shareholders of TDCF for a more rapid
return of capital remains that of selling the entire portfolio to a new
investor, a strategy that continues to be pursued.
    
Investments
    
The company's investment in Ekarat Engineering PCL was sold during the period,
and further divestments will be made as and when possible. A summary of the main
investments is as follows:
    
    Economic  Management  Co.,  Ltd. (EML) The company  has  met  its  targets,
    fulfilled  expectations, and has had a successful year,  although  was  hit
    with  pond losses in November due to a rapid drop in temperature. TDCF  has
    been  in negotiations with an interested party, and expects to close a sale
    of its stake in the company before the end of the year.
    
    Rajthanee Hospital (Public) Co. Ltd (RHC) The company continues to  operate
    in  a healthy state but TDCF's valuation is maintained at a 19% discount to
    current  book  value due to the difficulty of selling  the  shares  in  the
    short  term.  TDCF  has  been  exploring  an  opportunity  to  sell  to  an
    institutional  investor,  but  negotiations  have  been  slow.  A  sale  to
    management remains a possibility.
    
    Thai  Universal  Office Products Co. Ltd. (TUOP).  The company  has  had  a
    successful year, with sales growth of over 30%. Its wider customer base  in
    Europe  and  Australia has opened up new markets for the  company  and  has
    created  significant  opportunities. Current demand  requires  almost  full
    production capacity, and further capital investment is anticipated  when  a
    new  investor  is  identified. TDCF has been in discussion  with  potential
    investors, and negotiations continue.
    
    Non-performing investments, fully provided against
    
    Non-performing  investments  for which some  value  may  be  recovered  for
    shareholders in the long term have been grouped together, pending  ultimate
    divestment.
    
    Hideaway  Group  International Ltd. (HGIL) The Thai companies  continue  to
    operate  profitably with product sales a supplement to  earnings  from  the
    spa,  and negotiations are being held with management to buy out the  local
    operation.  The  new  owner of the rights to use  the  assets  of  the  USA
    operation  re-launched  successfully  the  range  on  the  Valuevision   TV
    network,  and  further  sales are expected in the New  Year.  However,  the
    investment continues to be fully provided against, since the timing of  the
    sale  of the Thai operations, and the ultimate success of the US operation,
    is difficult to estimate.
    
    SDS  Thailand Ltd. (SDS).  The company continued to face difficulties,  but
    the  new  management has been successful in resolving most of  the  issues.
    TDCF  converted  most of its loans to the company, and  sold  many  of  its
    shares  to management to facilitate the restructuring. New debt and  equity
    financing  is  still required, and the company's survival  will  depend  on
    this  being  achieved. Sales have remained strong, and the  order  book  is
    encouraging,  but  the  lack of working capital has prevented  the  company
    from  undertaking any larger contracts. Full provision continues to be made
    in  TDCF's  accounts against this investment. There continues  to  be  good
    potential  for the business, but this will remain unfulfilled  without  new
    investment,  and  so  any  eventual benefits to  shareholders  lie  in  the
    future.
    
      
   
   A summary of the portfolio is as follows:
   
   Main investments                          Valuation          % of assets
   
   Economic Management Co., Ltd.           US$   638,000           31.30%
   Rajthanee Hospital (Public) Co. Ltd     US$   543,517           26.66%
   Thai Universal Office Products Ltd.     US$   419,227           20.56%
   Pizza Public pcl                        US$   182,356            8.95%
   Others                                  US$   111,309            5.46%
   
   Total investments                       US$ 1,894,415           92.93%
   
   Bank deposits and cash                  US$   160,879            7.89%
   Interest due & other receivables        US$   146,385            7.18%
   Accrued expenses                        US$  -163,092          - 8.00%
   
                       Total net assets    US$2,038,587         100.00%
   
    
    
    The Directors
    22 December 2000
    
    
    
    Christopher S. Forbes         D. Graham Lean      Paul H. Smith
    



                          STATEMENT OF TOTAL RETURN
                   For the period ended 30 September 2000
                                      
                                      
                              6 months to                   18 months to
                              30 September 2000             31 March 2000
                              (Unaudited)                   (Audited)
                                                           
                              Revenue  Capital   Total  Revenue  Capital   Total
 
LOSSES ON INVESTMENTS

Realised losses                        (1,614)  (1,614)          (1,170) (1,170)
Unrealised gain (loss)                  1,794    1,794           (1,062) (1,062)
                                       ------   ------          -------   ------
                                          180      180           (2,232) (2,232)

Exchange differences                     (267)    (267)           1,442   1,442

INCOME
Dividend income                  35        -        35     253        -     253
Interest income                   2        -         2     312        -     312
Other income                      2        -         2      30        -      30
                              -----    -----     -----   -----    -----   -----
                                 39        -        39     595        -     595

LESS EXPENSES
Bank charges                      1        -         1       2        -       2
Director's salary                55        -        55     158        -     158
Directors fees                    7        -         7      45        -      45
Directors' travel &
 meeting expenses                 1        -         1      21        -      21
Auditors' remuneration
-fees for audit services          -        -         -      23        -      23
-other services                   -        -         -       -        -       -
Legal fees                       14        -        14      31        -      31
Advisory fees                     -        -         -      28        -      28
Administration fees               5        -         5      47        -      47
Representative office expenses   65        -        65     415        -     415
(Less earlier provisions)       (65)       -       (65)      -        -       -
General & administrative
 expenses                        14        -        14     137        -     137
                              -----    -----     -----   -----    -----   -----
                                 97        -        97     908        -     908
                              -----    -----     -----   -----    -----   -----
(LOSS)/RETURN BEFORE
TAXATION                        (58)     (87)     (145)   (313)    (790) (1,103)
Taxation                         (1)       -        (1)     (2)       -      (2)

(LOSS)/RETURN ON ORDINARY
ACTIVITIES AFTER TAXATION       (59)     (87)     (146)   (315)    (790) (1,105)


(LOSS)/RETURN PER ORDINARY
SHARE (US$)                   (0.03)   (0.05)    (0.08)  (0.18)   (0.45)  (1.63)





                                   BALANCE SHEET
                                        
                                      
                                      
                                           Unaudited at        Audited at
US$'000                                 30 September 2000    31 March 2000

ASSETS
Investments                                   1,894               1,938
Receivables                                     146                 152
Cash at bank                                    161                 322
                                              -----              ------
                                              2,201               2,412

LIABILITIES
Accrued expenses & provisions                   163                 228
                                              -----               -----
                                              2,038               2,184
                                              =====               =====
CAPITAL & RESERVES
Share capital                                   175                 175
Share premium                                 8,246               8,246
Reserves                                     (6,383)             (6,237)
                                             ------              ------
SHAREHOLDERS' FUNDS                           2,038               2,184
                                             ======              ======

NET ASSET VALUE PER ORDINARY SHARE            $1.16               $1.24

NOTES

1.   The results for the period ended 31 March 2000 are abridged and are
     taken from the audited accounts for that year which were distributed to
     shareholders in September 2000.

2.   The net asset value per ordinary share and the return/loss per share is
     calculated based on 1,754,500 shares in issue at each period end and
     throughout each period.

3.   The company has investments in four companies of greater than 20% of
     those companies issued share capital. These are associated undertakings for
     which it does not equity account, and of which two have been fully provided
     against. Dividends from these undertakings are taken to income when        
     declared. Interest on convertible loans made by the company is recognised 
     on an accruals basis, net of provisions.

4.   No interim dividends were declared out of earnings during the period. A
     partial return of original capital was made to shareholders in January     
     2000.

5.   The taxation represents Thai withholding tax. The company is resident in
     the Cayman Islands for taxation purposes, and is exempt from Cayman Island
     tax until the year 2010.

6.   Copies of the report and accounts are available for inspection at the
     company's registered address and at the registration agent, Bermuda
     International Securities (UK) Ltd., at Austin Friars House, 2-6 Austin
     Friars, London E2N 2HE, United Kingdom.



                                      
                             COMPANY INFORMATION


  Directors
  ---------
  
  Christopher S. Forbes
  D. Graham Lean
  Paul H. Smith
  
  Secretary and Registered Office
  -------------------------------
  
  Bermuda Trust (Cayman) Limited
  3rd Floor, 36c Bermuda House,
  Dr. Roy's Drive, George Town,
  Grand Cayman
  British West Indies
  
  Administrator and Share Registrar
  ---------------------------------
  
  Bank of Bermuda (Cayman) Limited
  3rd Floor, 36c Bermuda House,
  Dr. Roy's Drive, George Town,
  Grand Cayman
  British West Indies
  
  Share Registrar in the United Kingdom
        -------------------------------------

  Bermuda International Securities (UK) Limited
  Austin Friars House
  2-6 Austin Friars
  London EC2N 2HE
  United Kingdom
  
  Auditors
  --------
  
  KPMG, Chartered Accountants
  P.O. Box 493, Grand Cayman, Cayman Islands
  British West Indies


                                                                                
                                                                                
                                                              

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