What happened?

So the news came out two days ago after the market closed that the Supreme Court ruled to overturn the Central Bankruptcy Court’s ruling of 10 years ago in 2003. Now the Bankruptcy Court had approved JAS’s Business Reorganisation Plan in August 2003 and JAS had completed its restructuring plan and was out of the rehab plan in Sept ’06.

So what?

Well they could have to pay back the entire THB 8-8.5bn plus 7% interest for the past few years

Ohhhhh that sounds painful, what are their options?

From what we’ve read seems like there are 3 options

• JAS has to pay back all Bt8-8.5bn plus 7% interest rate for the past 10 years, this will cut JAS’s value by Bt2/share.
• Exclude the Bt1.8bn haircut of the debt JAS borrowed from its own subsidiary. This implies a cut in JAS’s value of Bt1.6/share.
• JAS’s legal advisor interprets the maximum repayment of only Bt1.3bn or Bt0.2/share.

What else is happening with the co?

They’ve been touting their infrastructure fund with a targeted size of THB 60bn – 70bn by the end of this year. This time line is rubbish in our viewpoint, we haven’t heard any movements with this yet by any Asset Management house or IB team, and if True can’t get their own IF out yet (announced before JAS), how on earth could JAS? There is no way they’ll have it done by year-end.

Anything else?

Investors are surprised, both retail and institutions, hence the stock price dropping some 15% in two days and it has been a darling for the past few years amongst several groups. Talking with friends/colleagues, I just don’t understand their margins they seem quite high when compared to any other firm in the world, yes I’ve been told we are wrong esp with the stock price gone up multiple folds, but lets see what unfolds here. The trust and confidence in this company from investors seems to have disappeared for now.