holding company restructuring - tisco holding co. ltd. 50% thai commercial auto co. ltd. 100% tisco...

Holding CompanyRestructuring

Contents

Objective and RationaleImpactRisk FactorsProcess and Key MilestoneSchedule of Presentation to All InvestorsCommunication Channel

Group Structure before Restructuring

TISCO Bank Public Company Limited/1

(Thai PermsapFinance Co.,Ltd)

TISCO GroupCo.,Ltd

100%

TISCO Securities Co. Ltd.

100%

TISCO Asset Management

Co. Ltd.

100%

TISCO Information Technology

Co.,Ltd.

100% 100% 100%

100%

/1 Listed on the Stock Exchange of Thailand

100%

Hiway Co. Ltd. TISCO Securities Hong Kong Ltd.

TISCO Leasing Co. Ltd.

TISCO Global Investment

Holding Co. Ltd.50%

Thai Commercial Auto Co. Ltd.

100%

TISCO Securities Singapore Pte.

Ltd.100%

VLT Leasing Co., Ltd.

Group Structure after Restructuring

TISCO Corporation Public Company Limited /1TISCO Corporation Public Company Limited /1

TISCO Bank Public Company

Limited /1

TISCO Bank Public Company

Limited /1

100%

/1 Swap listing status from TISCO Bank to TISCO Corporation Plc

100% 100%

TISCO Asset Management

Co. Ltd.

100%


Co., Ltd.

100%

100%

50%

100%

100% 100%

TISCO Securities Co. Ltd.


Holding Co. Ltd.Hiway Co. Ltd.


TISCO Leasing Co. Ltd. TISCO Securities

Hong Kong Ltd.


Holding Company RationaleRisk Reduction

Operating risks from other subsidiaries, which were previously aggregated at TISCO Bank, will be segregated from each other and will no longer be overlapping.

Lower Capital RequirementWith better diversification of risks, the group consolidated regulatory capital

requirements should be lowered in relative terms. TISCO Corporation Plc will be able to allocate excess capital more efficiently in term of higher dividend in the longer term and utilize excess capital for future business expansion.

Business OpportunityFlexibility for engaging in new business opportunities at each subsidiary

level e.g. strategic alliance, joint venture etc. can be increased. Greater flexibility will lead to increased capability to compete in the market place and yield better returns to shareholders.

Risk Reduction

Holding Structure

TISCO Corporation Parent Company

Current Structure

TISCO Bank Parent Company

• Operating risks from subsidiary companies were aggregated at TISCO Bank.

• Banking business relies on customers’ confidence, if other subsidiaries have any problems TISCO Bank may have to fact liquidity problems which will effect to customers’ confidence and the group’s stability.

• Operating risks from subsidiaries will be segregated from each other and will no longer be overlapping.

• Risks from subsidiaries are limited at each subsidiary company.

• Overall operating risks of the group will be reduced.

Lower Capital RationaleHolding StructureBank of Thailand’s rules and regulations Current Structure

• TISCO Bank needs to hold high amount of excess capital and overlapping of capital adequacy requirement.

• The group consolidated regulatory capital requirements should be lowered in relative terms.

• TISCO Corporation Plc will be able to allocate excess capital more efficiently in term of higher dividend in the longer term.

1. Banks are required to hold capital in proportionate to assets and contingencies not less than 8% of total capitals. Subsidiary companies have to maintain their capitals as required by the authorities.

• Limitation to support the bank’s subsidiary companies business operations.

• The bank has to hold high capital to cover all business activities of subsidiaries.

• The group will has no limitation to support subsidiaries’ business activities.

2. The proportion of investment limit, lending, and other contingencies to the banks’subsidiary companies not more than 25% of Tier 1 capital.

Business Opportunity

Holding Structure

TISCO Corporation Parent Company

Current Structure

TISCO Bank Parent Company

• Less flexibility in exploring and engaging in new business due to the rules and regulations governing banking business.

• Greater flexibility for engaging in new business opportunities at each subsidiary level e.g.

– investment in new business outside the group

– strategic alliance– joint venture

• Increase capability to compete in the market place and yield better returns to shareholders.

Financial Group Restructuring

The financial group restructuring shall be made in compliance with the upcoming Consolidated Supervision Regulation by setting up a new public company “TISCO Corporation Plc” with the same capital structure as that of TISCO Bank and swap shares with TISCO Bank’s shares.

The swap share price shall be made at TISCO Bank’s book value as of December 31, 2005, thus earnings from TISCO Bank’s operations shall be consolidated into TISCO Corporation Plc since January 1, 2006.

Group Governance and ManagementBoard of Directors

Executive BoardNominationCommittee

TISCO Group Plc. :§ Policy and strategy for the Group§ Risk management policy, compliance and

internal control for the Group§ Supporting : Human Resources, Planning

and Risk Management, Compliance andInternal control, Product Development andResearch, Corporate Secretariat & InvestorRelations and Corporate Marketing & Communication for the Group§ Internal Audit for the Group


Holding Co. Ltd.

TISCO Securities Hong Kong Ltd.

Hiway Co. Ltd.TISCO Securities

Co. Ltd.TISCO Asset Management

Co. Ltd.


Co. Ltd.

Board of Directors

Audit Committee

TISCO Leasing Co. Ltd.



Risk Management

Committee

TISCO Bank Plc.

Board of Directors Board of Directors Board of DirectorsBoard of DirectorsBoard of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Board of DirectorsTISCO Corporation Plc

Executive BoardNomination Committee

TISCO Corporation Plc :

TISCO Global Investment Holding Co. Ltd.

TISCO Securities Hong Kong Ltd.

Hiway Co., Ltd.

TISCO Securities Co., Ltd. TISCO Asset Management Co. Ltd.

TISCO Information Technology Co., Ltd.

Board of Directors

Audit Committee

TISCO Leasing Co., Ltd.



Risk Management Committee

TISCO Bank Plc

Board of Directors Board of Directors Board of DirectorsBoard of DirectorsBoard of Directors

Board of Directors

Board of Directors

Board of Directors

Board of Directors

Policy and strategy for the GroupRisk management policy, compliance andinternal control for the GroupSupporting : Human Resources, Planningand Risk Management, Compliance andInternal control, Product Development andResearch, Corporate Secretariat & InvestorRelations and Corporate Marketing & Communication for the GroupInternal Audit for the Group

Executive Board

Audit Committee

Risk Management Committee

Nomination Committee

Impact to TISCO Bank

The entire restructuring plan will be cancelled. TISCO Bank will buy back all investments sold to TISCO Corporation Plc at the same value.

< 75%

• TISCO Bank’s investment in subsidiaries shall be replaced by cash.• Contribution from subsidiaries performance will be excluded from the date of sales of investment (January 1, 2005)

≥ 75% to ≤ 100%

Impact to TISCO Bank% of Shares

Swapped

Impact to TISCO Bank

0.881.70Fully Diluted EPS (Baht)

1,425

Include benefits from subsidiaries

821Net Profit

Exclude benefits from subsidiaries

2005 (9M)(Baht in Million)

*Illustrated based on 2005 (9M) performance, diluted EPS, which *Illustrated based on 2005 (9M) performance, diluted EPS, which is the earnings for the common shareholders, are is the earnings for the common shareholders, are adjusted according to revised accounting standard for EPS calculadjusted according to revised accounting standard for EPS calculation as recommended by the Audit Committee and reation as recommended by the Audit Committee and re--stated for comparison.stated for comparison.

Impact to TISCO Corporation Plc

The financial position and performance of TISCO Corporation Plc.will be reduced proportionately to the lesser stakeholding in TISCO Bank. However, the shareholders will benefit as there are lowernumbers of shares required to be issued for the swap and while still eligible for 100% benefits from investment in other subsidiaries. Consequently, the earnings per share to TISCO Corporation Plc’s shareholders will decrease.

≥ 75% to ≤ 100%

The entire restructuring plan will be cancelled. TISCO Bank will buy back all investments sold to TISCO Corporation Plc at the same value.

< 75%

The performance of TISCO Corporation Plc and subsidiaries will be the same as consolidated performance of TISCO Bank and subsidiaries before the restructuring.

100%

Impact to TISCO Corporation Plc% of SharesSwapped

Impact to TISCO Corporation Plc

1.981.70Fully Diluted EPS (Baht)*

1,2201,425Net Profit

604604Share of Profit (Loss) from subsidiary & associated co.

821

100% Shareholding in TISCO Bank

616Net Profit from TISCO Bank’s operation

75% Shareholding in TISCO Bank

2005 (9M)(Baht in Million)

*Illustrated based on 2005 (9M) performance, diluted EPS, which *Illustrated based on 2005 (9M) performance, diluted EPS, which is the earnings for the common shareholders, are is the earnings for the common shareholders, are adjusted according to revised accounting standard for EPS calculadjusted according to revised accounting standard for EPS calculation as recommended by the Audit Committee and reation as recommended by the Audit Committee and re--stated for comparison.stated for comparison.

Illustration - Impact to Shareholders

Illustrated EPS (Baht) based on 2005(9M) performanceShareholders of

0.880.88TISCO Bank

1.70

100% shares swapped

1.98TISCO Corporation Plc

75% shares swapped

*Illustrated based on 2005 (9M) performance, diluted EPS, which *Illustrated based on 2005 (9M) performance, diluted EPS, which is the earnings for the common shareholders, are is the earnings for the common shareholders, are adjusted according to revised accounting standard for EPS calculadjusted according to revised accounting standard for EPS calculation as recommended by the Audit Committee ation as recommended by the Audit Committee and reand re--stated for comparison.stated for comparison.

Impact to Shareholders who not swap shares

• No secondary market for securities trading

• No reference share prices 1. No liquidity for securities trading

Capital gains from securities trading are

limited as there is no secondary market, but

still earns dividends.

2. Change types of gains from investment

• No tax privileges on capital gains• No stamp duty exemption for transfers of

registered securities where the Thailand Securities Depository (TSD) is not the registrar .

3. No tax privileges

Terms and Conditions of securities

Term and conditions of the newly issued common shares, preferred shares and warrants of TISCO Corporation Plc will be identical to the existing securities of TISCO Bank.

Dividend payment and Taxation

Dividend payment for the year 2006 will not be affected by the process.Shareholders who swap shares are subject to tax payment in the same manner as trading securities in the stock market.

Risk FactorsThe restructuring plan, share swap, and related processes are subject to approval of :

The ShareholdersThe Bank of ThailandThe Securities and Exchange CommissionThe Stock Exchange of Thailand

The success of the restructuring process is also conditioned on the percentage of shares of TISCO Bank that TISCO Corporation Plc manage to acquire from the share swap which must be no less than 75% of total shares.

The Extra-Ordinary General MeetingDateMeeting

Dec. 14, 200516.00 pm

the Auditorium21st Fl., TISCO Tower

TISCO Bank - EGM 2/2005To approve the swap listing status from TISCO Bank to

TISCO Corporation PlcThe approval must be granted with a ¾ vote of total

paid-up shares with no objection by more than 10% of total paid-up shares.

Dec. 14, 200513.30 pm

the Auditorium21st Fl., TISCO Tower

TISCO Bank - EGM 1/2005To approve holding company restructuringTo approve the disposition of shares in subsidiariesTo approve the listing plan of TISCO Corporation PlcThe approval must be granted with a ¾ vote of

shareholders who attend the meeting and have the rights to vote.

Restructuring Process

Step 1: Step 1: Set up TISCO Corporation Public Company Limited.Set up TISCO Corporation Public Company Limited.

Step 2: Step 2: TISCO Corporation Plc acquires investment in TISCO Corporation Plc acquires investment in subsidiaries ofsubsidiaries of TISCO Bank and TISCO Securities.TISCO Bank and TISCO Securities.

Step 3: Step 3: TISCO Corporation Plc increases capital with the same TISCO Corporation Plc increases capital with the same structure as that of TISCO Bank for share swap.structure as that of TISCO Bank for share swap.

Step 4:Step 4: Shares swap between TISCO Corporation Plc and Shares swap between TISCO Corporation Plc and TISCO Bank for all securities.TISCO Bank for all securities.

Step 5:Step 5: Swap listing status from TISCO Bank to TISCO Swap listing status from TISCO Bank to TISCO Corporation PlcCorporation Plc

Restructuring Process (Con’t)

1. Set up TISCO Corporation Public Company Limited

Registered capital 18,000 Baht(will be written down when the restructuring is completed)

• Number of common shares : 1,000 shares• Par value : 18 Baht per share

(equal to book value per share of TISCO Bank)

Shareholding structure • TISCO Bank : 98.5%• 15 individuals : 1.5%


2. TISCO Corporation Plc acquires investment in subsidiaries of TISCO Bank and TISCO Securities at book value;

99.9199,994• TISCO Information Technology Co., Ltd.

99.9999,994• Hiway Co., Ltd.

99.98,899,994• TISCO Leasing Co., Ltd.

99.9149,999,993• TISCO Securities Co., Ltd.

Subsidiaries of TISCO Bank%No. of sharesCompanies

99.9780,001• TISCO Global Investment Holdings Ltd.

Subsidiary of TISCO Securities

50.04,999,996• Thai Commercial Auto Co., Ltd.

99.9999,994• TISCO Asset Management Co., Ltd.

Restructuring Process (Con’t)3. TISCO Corporation Plc increases capital by 920,325,880

shares with the same structure as that of TISCO Bank for share swap.

18 Baht

920,325,880189,652,880

730,673,000

No. of shares increased

Total shares

Par value

Preferred shares

Common shares

Type of registered capital increased

The issuance and offering of the following securities to accommoThe issuance and offering of the following securities to accommodate securities date securities swap with TISCO Bank securities. Details are as follows;swap with TISCO Bank securities. Details are as follows;

8,923,750

180,729,130

541,020,120

Shares/units

8,923,750 for exercise of warrants

189,652,880 for preferred share conversion

Shares allocation (no. of shares)

Warrants

Preferred shares

Common shares

Type of securities

Restructuring Process (Con’t)4. Shares swap between TISCO Corporation Plc and TISCO

Bank for the same type of securities. Details of shares swap are as follows:

Type and Class of Securities : Common, Preferred, WarrantsThe swap ratio at 1:1The shares swap period will be a total of 25 business daysConditions :• TISCO Corporation Plc may cancel the shares swap if the

total securities acquired is less than 75% of total securities.• TISCO Bank’s shareholders may cancel the share swap

within the first 20 business days.TISCO Securities as a swap agent shall waive commission for investors.


Trading of TISCO Bank’s shares will be suspended after the end of shares swap period until TISCO Corporation Plc is listed on the SET.TISCO Corporation Plc’s shares will be trading on the Stock Exchange of Thailand once TISCO Corporation Plc is listed on the SET.

Period of shares swap and listing TISCO Corporation Plc

Shares Swap PeriodShares Swap Period

the first 20 daysthe first 20 days the last 5 daysthe last 5 days 2 working days2 working days

2 working daysThe last 5 days of shares swap period

The first 20 days ofshares swap period

TISCO Bank’s shares are no longer trading on the SET once shareholders have swapped TISCO Bank’s shares with TISCO Corporation Plc’s shares.

Shareholders cannot cancel the shares swap.

No trading of both TISCO Bank’s shares and TISCO Corporation Plc’s shares due to the preparation of shareholders registration and listing TISCO Corporation Plc on the SET.

TISCO Bank’s shares are still trading on the SET as usual unless shareholders have already swapped TISCO Bank’s shares with TISCO Corporation Plc’s shares.

Trading period

Shareholders (the offerees) can cancel the shares swap within the first 20 days

Shares swap period


5. Swap listing status from TISCO Bank to TISCO Corporation Plc by listing of TISCO Corporation Plc’s newly issued shares on the SET in place of TISCO Bank shares.

Financial Advisor

Advisory Plus Co., Ltd, was appointed as a financial advisor for the process. The presentation to the general investors will be conducted by the financial advisor on December 6, 2005.The financial advisor’s opinions on the appropriateness of the restructuring plan, swap ratio, and its impact to shareholders, will be submitted directly to the shareholders.

Schedule of Presentation on Holding Company Restructuring

The Auditorium21st Floor, TISCO Tower

General Investors14.00 -16.00 pmDecember 6, 2005 /1


General Investors9.30 – 10.30 amNovember 23, 2005

Room 303, 3rd FloorThe Stock Exchange of Thailand Building

General Investors14.00 – 16.00 pmNovember 16, 2005

Press10.30 -11.30 amNovember 9, 2005


Analysts and Fund Managers

9.00 - 10.15 amNovember 9, 2005

VenueParticipantsTimeDate

1/ TISCO Bank in co-operation with the Financial Advisor will conduct the presentation to make recommendation in accordance

with the SET rules and regulations.

Communication Channel

CALL CENTER : 0-2633-6868

E-MAIL : [email protected]

WEBSITE : www.tisco.co.th

WWW.tisco.co.th

holding company restructuring - tisco holding co. ltd. 50% thai commercial auto co. ltd. 100% tisco...

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