Sinar Mas may join Amcol rescue

Sinar Mas may join Amcol rescue

SINGAPORE (Reuter): The tortured tale of ailing Singapore
property and trading company Amcol Holdings has brought white
knights thundering to the rescue and one bid may be aimed at
saving face, market sources said yesterday.

Indonesia's Sinar Mas group, one of maybe a dozen potential
rescuers for a company under official investigation for alleged
financial irregularities, might be trying to help Indonesian-born
Sukamto Sia bail out of Amcol, they said.

Sinar Mas was likely to be an ally of Sia, Amcol's second
largest shareholder, they added.

Earlier this year, Sia battled Indonesian shareholder Henry
Pribadi for control of Amcol, put under judicial control in July
after an auditors' report revealed the depth of its problems.

Pribadi and Sia were invited to submit offers to take control
of the company. They did, but what happened to the offers is not
known.

Then came a clutch of white knights riding to the rescue.

Among them is Suntec Investment, a consortium which includes
Hong Kong millionaires Li Ka-shing, Sir Run Run Shaw and Frank
Tsao.

The Kwees of Pontiac Land are reported to be another front
runner. So is Sinar Mas, a conglomerate with interests in real
estate, property development, pulp and paper, agribusiness, food
and consumer products.

Suntec has confirmed it has made a rescue proposal. The other
companies were not immediately available for comment.

Amcol has been under judicial management since a Price
Waterhouse audit report said the company was in dire straits with
liabilities of S$1.16 billion.

It said Amcol, whose shares were suspended from trading on
July 19, needed an immediate injection of S$100 million to stay
afloat and a lot more to meet loan and bond covenants.

Its share last closed at S$2.62, from S$3.86 in mid July.

Just why so many white knights want a company in so much
trouble has been the subject of intense market speculation.

Market sources say they believe Sinar Mas may be as much a
white knight for Sia as for Amcol.

"It's a matter of face-saving for the Indonesians," said one
dealer. "The Indonesian group could be coming in to support the
share price and help Sukamto cut losses."

A trader at a local broking house said he did not think either
Pribadi or Sukamto would be satisfied with cutting losses. "They
would look for ways to at least recover their investments," he
said.

"If Sinar Mas was chosen as the rescuer, both Sukamto and
Pribadi might be able to retain some Amcol shares. They might be
able to recover their costs when the share price recovers."

Sukamto invested S$180 million for his 14.2 percent stake
while Pribadi paid S$260 million for his 17.92 percent share.

Some dealers said Sinar Mas could inject its overseas
businesses into Amcol for long-term investment.

"Big Indonesian companies are coming to buy stakes in
Singapore companies whose share prices have fallen drastically.
It is a cheap way to get a main board listing for their
businesses outside Indonesia," said a manager of a local firm.

"Amcol's running businesses are still not too bad. It is not a
cancer case yet, that's why these people are willing to take the
risk," one dealer said.

Some dealers, however, saw Suntec emerging the winner. "I
think Suntec is the stronger contender," said one.

"Suntec does not have a listing. By injecting its Singapore
business into Amcol, Amcol would still be a Singapore play. Their
edge is also in their very high powered, liquid individuals
backing the company," he said.