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 …show more content…

However,
the
market
condiOons
since
then
have
changed
and
resulted
into
a
bust
of
a
bubble
on
the
housing
market.
It
is
 obvious,
that
this
investment
was
finally
unprofitable
for
the
investors.
To
illustrate
this,
we

have
created
two
scenarios:
 1) 1.1.
Investors
will
exchange
their
bonds
for