Peregrine chief turns tables on Hong Kong
REUTER
HONG KONG, Jan 13: Philip Tose, chairman of the bankrupt investment bank Peregrine Investments Holdings Ltd, said on Tuesday that his firm had approached the Hong Kong government for help, but was turned down."We went to the Hong Kong government to inform them of the situation. We asked whether it would be possible for the Hong Kong government to help," said Tose at a news conference. "As you know, there are very strict regulations governing the use of the public money funds that they have," Tose said. "One of those must be that there is a highlighted or a systemic risk within Hong Kong and clearly, obviously to our disappointment, they decided that there was not," he said. Deep in debt, Peregrine said earlier it had appointed PriceWater House as its provisional liquidator. Tose, however, said the government's decision was right. "But I do believe quite honestly having seen the reaction in the market that the decision taken was the right decision even though of course I don't like it, but that's
life," he said. Meanwhile, Peregrine Investments applied to a Hong Kong court on Tuesday to place the big Asian investment bank into liquidation. "They should be in court at the moment. An application is being made to put Peregrine Investments Holdings into liquidation and appoint a provisional liquidator and they are in court right now," official receiver Robin Hearder said. Peregrine's collapse has struck a blow to local and regional markets already reeling from financial turmoil. A Price Waterhouse official said on Monday that the firm was likely to be appointed as liquidator. Peregrine said on Monday that it was filing for liquidation after a crucial deal to inject vital funds into the firm collapsed last Friday, leaving the firm to default on debt. Zurich Centre Investments, a unit of Zurich Group, abandoned a deal to subscribe for US$200 million worth of Peregrine convertible preference shares. The collapse of the deal scuppered a further injection of US $25 million which First Chicago
International Finance Corp, a unit of First Chicago NBD Corp had agreed to in return for a further issue of convertible preference shares. Peregrine said on Monday that it still hoped parts of the business could be sold. ``There is considerable hope that parts of the company will be bought. Judging from what we see right now, there is very good possibility for Peregrine Capital and also for Peregrine Securities International,'' said Tom Grimmer, who was a spokesman for Peregrine until he was laid off with other non-essential staff on Monday. Peregrine Asset Management said it was in talks with banks and asset managers about being acquired. ``We are in discussions with 12 very serious banks and asset managers and hope to announce the sale of Peregrine Asset to a stronger partner by the end of the week," William Hortz, president of Peregrine Asset Management USA said on Monday. Peregrine Investments owns 75 per cent of the asset firm and directors, holders and employees own the other 25 per cent.
Peregrine Investments had been reducing its balance sheet since June last year. "We reduced our balance sheet in June from US$5.3 billion toaround US$3.2 billion. So over US$2.1 billion by the sale of various assets," said chairman Philip Tose. He said the company faced a tight funding problem,particularly when the economic and currency crises in the region gathered pace. "The position of the group was that it was tradingprofitably but that we had a tight funding problem," he said. Tose said the company's exposure in the bond market was substantial and a factor in its downfall. "Clearly the exposure to the bond book was substantial and did play a role,"chairman Philip Tose said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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