Symbol: CNT
Headline: Request to moving from REHAB CO
Time: 10 Sep 2004 17:08:00
(Translation)
Ref. : MGT/SET/007/2004
2 September 2004
Subject: Request for eliminating the cause to be delisted and return to former sector
To : The President
The Stock Exchange of Thailand
With reference to the notification of The Stock Exchange of Thailand (SET) dated 19
November 1996 that Christiani & Nielsen (Thai) PCL, a listed company, during the
implementation of the Rehabilitation Plan would be placed under "REHABCO". C N Advisory
Co., Ltd. as the Plan Administrator (the Planner) of the Company would like to inform
that the implementation of the Plan to rectify the financial and operation problems is
now completed according to "Adjustment to Guidelines Dealing with Listed Companies
under the REHABCO Sector" dated 30 April 2004. Details are listed below:
1. Shareholders' Equity as of 30 June 2004 amounted to 762.86 Million Baht
According to Christiani & Nielsen (Thai) PCL and its subsidiaries' financial
statement for the six-month period ended 30 June 2004 Shareholder's Equity amounted
to 762.86 Million Baht.
2. Net Income from Operation during the past year
From 3rd quarter 2003 to 2nd quarter 2004, the Company has consecutively
shown net income from operations totalling 137.36 Million Baht. The adjusted net
income from operations for the Company and its subsidiaries' financial statement
audited and reviewed by the Auditor are as follows:
Unit : Thousand Baht
Statement of Earnings Quarterly operating results for the past year Total Operating Results Remarks
(information from audited and reviewed financial for the past year
statements by the Auditor)
3rd Q. 4th Q. 1st Q. 2nd Q. Total Adjusted Total
2003 2003 2004 2004
REVENUE
Construction income 770,462 1,032,811 1,062,052 1,039,959 3,905,284 3,905,284
Gain from sales of
investments in subsidiaries and
associated companies 480,849 0 0 2,227 483,076 0 (1)
Reversal of provision for loss
from diminution in value of
investment and assets 295,318 36,628 0 0 331,946 0 (2)
Bad debt recovery and
reversal of allowance for
doubtful accounts 4,087 3,250 4,807 26,810 38,954 38,954
Other income
Interest Income 0 2,730 0 1,000 3,730 0 (3)
Gain from Exchange Rates 14,951 (14,951) 144 0 144 0 (3)
Others 7,467 (1,361) 3,155 4,510 13,771 2,160 (4)
Total Other Income 22,418 (13,582) 3,299 5,510 17,645 2,160
Total Revenues 1,573,134 1,059,107 1,070,158 1,074,506 4,776,905 3,946,398
EXPENSES
Costs of construction 732,436 939,412 1,018,612 985,985 3,676,445 3,676,445 (5)
Administrative expenses 37,050 36,942 30,802 30,801 135,595 129,704 (6)
Loss on exchange 0 (15,809) 0 794 (15,015) 0
Depreciation 2,555 2,811 3,015 3,598 11,979 11,979 (7)
Doubtful accounts 12,020 (2,376) 0 0 9,644 0
Director's remuneration 1,020 1,020 1,020 1,020 4,080 4,080
Total Expenses 785,081 962,000 1,053,449 1,022,198 3,822,728 3,822,208
Earnings before exceptional
items, interest expenses, tax,
results of discontinued
operation units and
extraordinary item 788,053 97,107 16,709 52,308 954,177 124,190
EXCEPTIONAL ITEM
Provision from loss on
guarantees and other liabilities 0 (112,000) 0 0 (112,000) 0 (8)
Earnings before interest
expense, tax, results of
discontinued operation units
and extraordinary item 788,053 (14,893) 16,709 52,308 842,177 124,190
Interest Expenses (3,695) 2,708 (351) (71) (1,409) (1,409)
Corporate income tax 17,447 (948) (745) (1,175) 14,579 14,579
Earnings before results of
discontinued operation units
and extraordinary item 801,805 (13,133) 15,613 51,062 855,347 137,360
Results of discontinued
operation units (4,197) 138,938 170,254 (416) 304,579 0 (9)
Earnings before extraordinary
item 797,608 125,805 185,867 50,646 1,159,926 137,360
EXTRAORDINARY ITEM
Gain from debt restructuring 0 803,415 0 0 803,415 0 (10)
Net Earnings for the period 797,608 929,220 185,867 50,646 1,963,341 137,360
The adjustments to Statement of Earnings during the past year to reflect
the net operating income from core business are as follows:
Remark (1)
Gain from Sales of Investment in Subsidiaries and Associated Companies of 483.076
Million Baht is excluded from the calculation since it was the proceeds from the
sale of investment in subsidiaries and associated companies which are in accordance
with the Capital Restructuring in the Rehabilitation Plan which was approved by the
Central Bankruptcy Court.
Remark (2)
Reversal of Provision for loss from diminution in value of investment and assets of
331.946 Million Baht is excluded from the calculation since the transactions were:
(2).1 Reversal of Provision for loss from diminution in value of assets of Harmony
Property Group Limited. The provision was set up by the Group in 1999. However,
during 2003 the Company was able to negotiate the sale of the project of Harmony
Property Group Limited at a higher price than the book value. The Company has
therefore reversed the unnecessary provision amount from the accounts.
(2).2 During the year 2003, ownership of land previously mortgaged with a commercial
bank to secure credit facilities of the previous owner of the land, was transferred
to a subsidiary, CNT Holding Co., Ltd. The subsidiary subsequently transferred
the ownership of this plot of land to settle debt it had with the Company at the
appraised value of approximately 40 Million Baht. As a result, the subsidiary
reversed the excess of provision for loss previously set up in the accounts.
Remark (3)
Interest Income of 3.73 Million Baht is excluded from the calculation since
the interest was earned from deposits at banks and financial institutions.
Income from Exchange Rates of 0.144 Million Baht is excluded from the calculation
since the income was from the Translation Adjustment of the loans from and to
the Company and its subsidiaries denominated in Thai Baht at the exchange rates
ruling on the period of accounts ended.
Remark (4)
Other Income of 13.771 Million Baht included the dividend from investment in
Associated Company of 2.16 Million Baht, and this is included in the calculation.
Remark (5)
Administrative Expenses during the past year were 135.595 Million Baht. The
Company has excluded the expenses for implementing the Rehabilitation Plan
consisting of fees related to the petition to The Central Bankruptcy Court,
fees for legal advisor, financial advisor and other related expenses totalling
5.891 Million Baht. The net administrative expenses included in the calculation
are 129.704 Million Baht.
Remark (6)
Loss from exchange rates of (15.015) Million Baht is excluded. The loss was from
the translation adjustment of investments in subsidiaries and associated companies
in foreign countries translated to Thai Baht. However, the Group has mostly sold
the investments and believes that the loss from exchange rates will no longer have
a significant impact on the Company's financial statements.
Remark (7)
Doubtful Accounts of 9.644 Million Baht is excluded. The provision was not provided
for the debt from construction activities but debt from lending to and borrowing from
the subsidiaries and associated companies.
Remark (8)
Reserve for potential loss of 112 Million Baht from guarantee obligations is excluded.
In Quarter 4th of year 2003 the Company reserved for a potential loss from obligations
and other liabilities, which included The Creditor Group 8 (Guarantee Note Creditors
for loan to related company) / The Creditor Group 9 (Guarantee Note Creditors) / The
Creditor Group 11 (Revenue Department) / and The Creditor Group 12 (Other Creditors)
who submitted claims according to the Plan. The Company has reserved a potential loss
of 112 Million Baht estimated at the rate of 3 percent of obligations and payable claims.
The Management believes that such reserve will cover losses and that no other significant
liabilities will be incurred.
Remark (9)
Results of discontinued operation units of 304.579 Million Baht is excluded.
Remark (10)
Gain from debt restructuring of 803.415 Million Baht is excluded. The gain is from
settlement of the debt with the Group of Creditors according to the Plan.
3. The Company has successfully implemented the majority part of debt restructuring
according to the Plan and reserved the allowance for possible loss from guarantees
and other liabilities amounting to 112 Million Baht estimated from the claims. Apart from
this, during the past year the Company settled all debts to Creditors in the Plan.
During the year 2002, the Company, as a parent company who provides guarantees to
the subsidiaries, received claims from creditors of its subsidiaries for the repayment
of loans and guarantees totalling approximately 1,429 Million Baht. Under the situation
and financial status of the Company at that time, which still had significant deficit
and capital deficit, the Company was not capable of repaying such liabilities. The
Company therefore, on 31 May 2002, lodged a petition for rehabilitation of its business
with the Central Bankruptcy Court and the Court, on 8 July 2002, ordered the rehabilitation
of the Company's business in accordance with the Bankruptcy Act and appointed CN Advisory
Co., Ltd. as Planner.
Following the Court's order for the rehabilitation of the Company's business the Company,
on 15 January 2003, proposed its rehabilitation plan to the creditors and the plan was
approved by the majority of its concerned trade and financial institution creditors on
18 February 2003 and subsequently agreed by the Central Bankruptcy Court on 2 May 2003,
and which appointed CN Advisory Co., Ltd. as the Plan Administrator. The Rehabilitation
Plan of the company consisted of Capital Restructuring, Group Restructuring and Debt
Restructuring.
The Capital Restructuring comprised the decrease and increase of the Company's capital
according to the Plan.
The Group Restructuring comprised the disposal of the Company's investment or projects
or closure of dormant subsidiaries or subsidiaries with operating loss in accordance with
the Plan.
The Debt Restructuring, according to the Plan, consisted of 12 Groups of Creditors
with total claims of 10,945 Million Baht. The Company has completely settled the debt
to each group of creditors which are significant to the Plan. The outstanding debt
to be settled as of 30 June 2004 are Creditors Group 6 (Trade Creditors) totalling 9.80
Million Baht and Creditors Group 7 (Lending Creditors from related companies) totalling
5.15 Million Baht. Moreover, the Company has reserved for potential debt from guarantees
and other liabilities for Creditor Groups 8, 9, 11 and 12 totalling 112 Million Baht. The
company will pay to such creditors the reserved amount after the Official Receiver or
the Court has issued a final decision on the claims. The reserve of 112 Million Baht
was estimated at the rate of maximum loss which may incur.
4. The solid ground of financial status and operating result of the Company according to
the continuity of its business.
Considering the information below, the Company's financial status and operating result is
on solid ground according to the continuity of its business:
4.1 The Company has successfully implemented its Capital Restructuring, Debt Restructuring
and Group Restructuring according to the Plan which has resulted in a strong financial
position for the following reasons:
(a) The Capital Restructuring consisted of a decrease in capital to compensate
retained losses by the transfer of the legal reserve for the premium of par value,
and a capital increase by existing shareholders. As of 30 June 2004 registered
capital amounted to 312.02 Million Baht and Shareholders' Equity amounted to 762.86
Million Baht, compared to the deficit of Shareholders' Equity or the retained losses of
762.80 Million at year ended 2003. With the new registered capital and shareholders'
equity, the Company has more chance to bid for construction projects of both government
and business enterprises who consider a registered capital and positive shareholders'
equity as part of bidder's prequalification. Moreover, the Company's liquidity has
improved i.e. as of 30 June 2004 the liquidity ratio of the Company is 1.23 compared
to the ratio of 0.62 and 1.17 at year ended 2002 and 2003 respectively. The Company's
cash and cash equivalent as of 30 June 2004 was 424.84 compared to 130.83 Million Baht
and 375.60 Million Baht at year ended 2002 and 2003 respectively.
(b) As a result of the successful Debt Restructuring the Company's total
liabilities as of 30 June 2004 decreased to 1,502.20 Million Baht (compared to
2,627.71 Million Baht at year ended 2002 and 1,546.44 Million Baht at year ended 2003).
Liabilities with interest payment, including overdraft and short-term borrowing,
amounted to 11.62 Million Baht (compared to 303.46 Million Baht at year ended 2002
and 74.85 Million Baht at year ended 2003). The long-term liabilities were nil as of
30 June 2004 (compared to long-term liabilities for debentures amounting to 232.58
Million Baht at year ended 2002). Total liabilities as of 30 June 2004 amounted to
1,502.20 Million Baht mainly from normal business activities, comprising trade creditors
and accrued construction costs amounting to 757.45 Million Baht, advances from customers
amounting to 170.11 Million Baht, estimated expenses for construction projects amounting
to 218.36 Million Baht and provision for expenses amounting to 155.01 Million Baht.
The reduction of liabilities resulted in the reduction of interest expenses. The debt
to equity ratio as of 30 June 2004 was 1.97:1, which is better than the ratio of 3:1
at the year ended 2003 and the deficit at the year ended 2002.
(c) The successful Group Restructuring, comprising the disposal of investments
or projects or the closure of dormant subsidiaries or subsidiaries with operating loss,
resulted in the Company operating its remaining current core business of construction
in Thailand. The Group structure as of 30 June 2004 was as follows:
Companies Type of business % of shareholdings Paid up capital Investment Value
(Million Baht) Equity method
(Million Baht)
Investments in Subsidiaries
Christiani & Nielsen Construction
(Thai) Co., Ltd. Construction 100.00 1.00 (30.36)
CNT Holdings Co., Ltd. Holding 100.00 2,600.00 349.17
CN Advisory Co., Ltd. Plan Administrator 100.00 1.00 1.38
Investment in Associated Companies
International Machinery Supplies Construction 31.94 17.50 0
Co., Ltd. Equipment Trading
Investment in Joint-Venture
Nawarat, Italian-thai, Christiani
and A.S. Joint Venture Construction 25.00 8.00 12.77
4.2 The Company has expanded its operation by continuing to bid for many projects,
which resulted in an increase in construction income. Income for the year 2003
was 3,332.24 Million Baht which is an increase of 45.65% from 2,287.80 Million
Baht in the year 2002. For the six-month period of the year 2004 the construction
income was 2.102.01 Million Baht, an increase of 37.48% from 1,528.96 Million Baht
in the same period of year 2003. Due to the severe competition in construction
business and the increase of raw material, the gross profit margin on construction
income was reduced to 4.63% compared to 8.93% and 5.45% for the same period in the
year 2002 and 2003, respectively.
However, the Company was able to control and continually reduce the Administrative
Expenses. The ratio for Administrative Expenses to Total Revenue was reduced from
5.76% in year 2002, 4.01% in year 2003 and 2.87% for the six-month period of year 2004.
4.3 With lower interest expenses, the positive trend of construction business and the
ability to generate more income from construction activities together with the
efficient control of administrative expenses, the Company can foresee its strong and
solid foundation in the future.
4.4 The Company is a well-known construction contractor for many years and has completed
many projects for both government and business enterprises since 1933. It has
experience and expertise in construction of infrastructure, building and marine
engineering. As of 30 June 2004 there were 39 construction contracts in progress
valued at 5,935 Million Baht with a remaining backlog of 1,807 Million Baht, which
will be gradually realized in the latter part of year 2004 until year 2005.
4.5 As of 30 June 2004, 19 projects were being bid, amounting to 4,978 Million Baht. The
bidding includes both government and business enterprises. The Company has already
been awarded 6 projects totalling 895 Million Baht and expects a further 6 projects
totalling 3,500 Million Baht to be awarded.
5. Silent Period
According to the Silent Period stipulated by The Stock Exchange of Thailand (SET), this
prohibits company's strategic shareholders to sell their shares within the period of time and
in the proportion specified by SET. Below are the list of 22 strategic shareholders with a total
of 285,987,763 shares or 91.65% of paid-up capital:
Strategic Shareholders Total Number Total Number of Shares % of paid-up capital
(Common Stock)
1. Government, state enterprises
and government agencies 0 0 0
2. Directors, managers, or persons
with managerial authority including
concerned persons and those who
have relationship with the Company 17 9,866,974 3.16
3. Shareholders that hold more
than 5% including concerned persons 5 276,120,789 88.49
4. Shareholders that have agreements
not to sell their shares within
specific time. 0 0 0
TOTAL 22 285,987,763 91.65
With the successful implementation of the Plan to rectify the financial and
operation problems now completed according to "Adjustment to Guidelines Dealing with
Listed Companies under the REHABCO Sector" dated 30 April 2004, the Company hereby
requests SET to consider and allow the Company's securities to be traded, as normal,
under the regular sector.
Yours faithfully,
- Signatures -
(Mr. Saranthorn Chutima) / (Mr. Danuch Yontararak)
C N Advisory Company Limited
As Plan Administrator of
Christiani & Nielsen (Thai) Public Company Limited