Malaysia's Berjaya unveils restructure

In this story: Group is controlled by tycoon Vincent Tan Newco will be focus of changes Digi ranked third in mobiles RELATED SITES

KUALA LUMPUR, Malaysia -- Malaysia's debt-laden Berjaya Group and some of its listed units announced a major debt restructuring plan Wednesday.

The plan will help recapitalize Berjaya Group's capital base via $684 million (2.6 billion ringgit) in additional equity and quasi-equity, a Berjaya Group statement said.

Berjaya and its units are involved in gaming, hotels, property development, construction, manufacturing and trading.

The company said it would cut the group's bank borrowings by $237 million (900 million ringgit) and rejuvenate its income stream with the prospect of a profit turnaround by 2003.

Group is controlled by tycoon Vincent Tan

Berjaya posted a net loss of $80 million (302.88 million ringgit) for the nine months to January 31.

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

Gambling businesses have been the bedrock of Tan's empire, whose success story began when he won the McDonald's Malaysia franchise 20 years ago. After leisure and healthcare, Tan branched into telecoms via Multiara Swisscom, now renamed Digi.Com.

Tan's aggressive business style saw Berjaya become one of the high-profile Malaysian conglomerates hard-hit by Asia's 1997-1998 crisis.

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

Newco will be focus of changes

Under the plan, Berjaya Group shares and securities will be exchanged for shares and securities in a newly-incorporated company (Newco).

It proposes Newco will issue about 300 million ringgit of Newco shares and 600 million ringgit in Newco loan stocks to repay loans.

Trading in shares of Berjaya Group and units Berjaya Land, Berjaya Capital and Cosway Corp were suspended ahead of news on the group's restructuring.

The restructuring plan includes the exchange of four Berjaya Group shares for one Newco share. Newco shares will be issued at a premium of 10 percent over par value because the proposed Digi deal is a related-party transaction.

Digi ranked third in mobiles

Berjaya Group will buy a 20 percent stake in mobile phone company Digi.Com Bhd from Tan for 975.0 million ringgit in Newco shares and warrants, valuing Digi shares at 6.50 ringgit each. This will raise Berjaya Group's stake in Digi to 23.57 percent.

Digi shares, whose trading was also suspended, closed at 5.35 ringgit on Tuesday.

Digi is ranked third among the country's five telecom firms, enjoying top market share in the cellular pre-paid business. The main shareholders are Norway's Telenor and Vincent Tan with stakes of 33 percent each in the firm.

Reuters contributed to this report.

Berjaya Group

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