To: Business Editor For Immediate Release
SCALE DOWN OF PEREGRINE CAPITAL MYANMAR'S
ACTIVITIES
Hong Kong, 4th January 1997 --- Peregrine Capital Myanmar Limited
("PCM"), a subsidiary of Peregrine Investments Holdings Limited, announced that
it has decided to scale down its operations in Myanmar. Whilst maintaining formal
representation in Myanmar, it will close down its office on or before 31st January 1997.
During the Peregrine Group's annual review in November, senior
management conducted a critical review of the performance and prospects of all the Group's
businesses. In relation to Myanmar, senior management noted that when Peregrine first
opened up its office in Myanmar in 1994, it was expected that the Government would embark
upon a wide ranging privatization program. Peregrine hoped to generate income providing
financial advice and by assisting in capital raisings for these "former" state
owned enterprises. Unlike other Asian countries, particularly China, a privatization
program has not materialized in Myanmar and there is little evidence to suggest when it
will take place. Furthermore, the anticipated establishment of a securities market has not
taken place.
Nevertheless, 1996 was a year in which PCM began to put the problems
it had with its government joint venture partner behind it. However, Peregrine's senior
management noted that PCM's 1996 profits were derived entirely from fish and commodity
trading, which are not core activities for the Peregrine Group.
"Success for PCM in the US courts in its action against its
former Chairman Miriam Segal, meant that PCM could in theory operate in an environment
free from the external interference that had dogged it previously." said Alan Mercer,
director of PCM, "In fact PCM managed to make a small profit in 1996 for the first
time".
Despite this, Peregrine has concluded that in the medium term there
is little prospect of PCM generating a meaningful amount of income from the Group's core
business activities of corporate finance and investment advisory work. As regards direct
investment, the emphasis of the Group is on China and emerging markets in South East Asia
where Peregrine has been very successful, not Myanmar.
"Peregrine's senior management questioned whether the Group
should spend a significant amount of management time developing and growing the non-core
commodity business in Myanmar whilst waiting for the emergence of a proper securities
market." Mr Mercer added, "With some regret, it has been decided that we could
not make such a commitment."
Mr Judd Kinne, Chairman of PCM said, "During 1996, Peregrine
succeeded in re-establishing both its credibility and integrity in Myanmar - but in the
final analysis Myanmar was not going to make the kind of return the Group expects to earn
on its investments."
"Putting emotions aside, a dispassionate analysis of the
financials meant that remaining in Myanmar did not stack up", added Mr Kinne.
Peregrine is, however, still pursuing recovery in Myanmar of US$1.5
million in loans made to Myanmar American Fisheries, a joint venture body controlled by
the country's Ministry of Fisheries. Peregrine is also pursuing substantial financial
claims against its former main board director Claude Charles for breaches of his fiduciary
duty in relation to its business in Myanmar. As regards Ms Segal, Peregrine has commenced
proceedings to enforce its US$4.1 million U.S. Federal court judgment against her and a
court appointed receiver has already begun to liquidate part of her property.
For further enquiries, please contact:
Alan Mercer Tel: (852) 2825-1112