Siam
Sindhorn
Co.,
Ltd.
 Applied
Financial
Engineering


The
logic
behind
the
original
deal


To
be
achieved
through
the
deal:


‐ Clean‐up
the
crossholding
structure
because
of
 up‐coming
IPO
(dispose
of
6%
L&H
shares)
 ‐ Minimize
capital
gain
tax
on
stock
sale:
new
 BHV
based
in
BriOsh
Virgin
Islands
will
issue
 bonds
and
sell
them
at
the
book
value
 ‐ AQract
foreign
investors
 ‐ Receive
financing
for
company’s
acOviOes


09/11/2011


8


Advantages
for
the
shareholders:

‐ Minimizing
bankruptcy
costs
‐
in
case
of
financial
distress
 exchanging
bonds
to
exchange
property
may
stave
off
 bankruptcy

(this
is
the
special
feature
of
exchangeable
bonds,
 converOble
bonds
do
not
bear
this
advantage)
 Dispose
of
the
shares
without
paying
30%
capital
gain
tax
 Raising
cheap
debt
‐
company
is
able
to
offer
the
bond
at
a
 lower
coupon
rate
‐
less
than
it
would
have
to
pay
on
a
straight
 bond
 Bondholders
are
not
enOtled
to
vote
=>
voOng
control
remains
 in
the
hands
of
the
common
stockholders
 Bond
interest
is
a
deducOble
expense
for
the
issuing
company
 Delayed
diluOon
of
common
stock
and
earnings
per
share
(EPS)


‐ ‐

‐ ‐ ‐

Main
components
of
the
deal
(1)

Exchangeable
Bonds
 QuanOty

 








 Face
Value
 Coupon
 Maturity
 Bond
Exchange
Rate
 Exchange
Property
 
 9
000
 $10
000
 2%
p.a.
 31.7.2000
 1
bond
=
598.26
shares
 5
384
355
shares

 of
Land
&
Houses
 Warrants
 QuanOty
 
 2
610
000
 Exercisable
 31.8.1995
–
23.7.1998
 Exercise
price
 422.92
Baht

 1
bond
=
290
warrants
(issued
together,
dealt
 separately
ager
30
days)


Loyalty
Warrants
 
 1
bond
held
31.7.1995
=
167
warrants
 Exercise
price
=
last
month’s
average
share
 price


Warrant
Exercise
Period
 31.8.1995
 23.7.1998
 23.7.2000


31.10.1995


Bond
Exchange
Period
 31.7.1997


31.7.1995


96
 Loyalty
warrants


98


99


31.7.2000

8


09/11/2011