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EXCERPTS
Restructuring to Survive
Sale of Assets
One of the first steps in the restructuring plan was the decision to sell stakes in profitable group companies in Thailand, China and a few other countries. In line with this decision, in April 1998, CP sold 32 million shares in CPP at HK$ 1.08 per share. This was below the price ($1.52 per share) it had paid to buy 2.6 million shares of CPP in November 1997.
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In May 1998, CP sold its stake in Shanghai Ek Chor Motorcycle, one of its highly profitable businesses, for $12.8 million. Commenting on this, Sumet Jiaravanon, President, Shanghai Ek Chor Motorcycle, and Dhanin's brother, said, "Like many companies in Asia, CP Pokphand has been affected by the tighter financial conditions in the region. This disposal will provide a cash boost to the company, and we will continue to examine ways to improve liquidity further." CP also sold its stake in its brewery joint venture (with Heineken) and TA's stake in Apstar, a Chinese satellite operator. In Thailand, it sold 11% of its stake in its most profitable 7-Eleven convenience store business, closed many subsidiaries of TA including its paging division, software consultancy and equipment distributor; and sold off many petrol stations...
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CP's Global Excursions - China & Beyond
In October 2000, CP announced plans to become the largest agri-business conglomerate in Asia. It planned to do this by consolidating its control over the various joint ventures the group had in the food business across Asia, (except those in China and Indonesia), in the next few years. For this purpose, it hired two consultancies, JF Thanakom and Tisco Finance. These two helped CP acquire full control of its food and agri-business joint ventures in Vietnam, Taiwan, Turkey, India and Malaysia.
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Commenting on the rationale behind the buy-back of stocks, Adirek Sripratak, Vice President, CPF said, "We have an ambition to develop ourselves to become regional company, with many networks in countries throughout the region." Meanwhile, in its chicken and shrimp products businesses, demand for Thai products had increased dramatically in the EU
and in Asian countries after 2000. This increase was attributed to the
outbreak of various animal diseases like avian flu and "mad cow"disease
in those countries. This increase in demand led to high export revenues
for CP - it was clearly the largest exporter of chicken and shrimp from
Thailand. A weaker baht also helped strengthen the group's export
competitiveness... |
Excerpts Contd... >>
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