Peregrine blames rupiah

Tose declined to identify potential purchases though some investment bankers said parties may also be interested in acquiring Peregrine’s direct-investment business. Yesterday, Peregrine applied to a Hong Kong court to place the company into liquidation and the court appointed Price Waterhouse as provisional liquidator.

"We’ve had expressions of interest of many different types for parts of Peregrine," said David Hague, a partner at Price Waterhouse. Tose said after the Thai baht began plunging in July, Peregrine took steps to shield itself, shrinking its total assets to $ 3.2 billion by selling $ 2.1 billion of its assents.

In November, Swiss insurance giant Zurich group agreed to invest $200 million in Peregrine, which would have bolstered the firm’s capital. But, Peregrine had sizeable holdings of debt from Indonesian companies and the value of those assets dwindled rapidly as the rupiah continued to plummet. "No one in their right mind would have even factored in such a plunge," Tose said, adding "we got caught as a result of our ill liquidity and a meltdown in currencies." He declined to disclose the size of Peregrine’s debts.

He said Peregrine executives had sought out other banks and authorities, including the Hong Kong government, for help when it became clear that one of their major lenders First Chicago NDB Corporation had withdrawn its promised funding.

"But we were unable to secure any more funding. As a result, we went into default. That triggered cross defaults on virtually all our loan notes and convertibles. It was almost certain from then on that we could no longer continue," said Tose, his voice wavering.

"It is very sad. But those are the facts," he said and after declining to take further questions, quipped, "now I would like a little bit of peace and quiet." Meanwhile, liquidators today began the complex task of putting a price on the black hole that brought down Peregrine.

Asian currencies recover

SINGAPORE: Asian currencies leapt on Wednesday as the US dollar lost face against the yen and stock markets across the region took their cue from Wall Street’s second session of gains.

The dollar fell below 131 yen in morning trade, against an overnight high of 132.95 yen, as Tokyo stocks surged. Soothing comments about Asia’s financial crisis by officials from the US and the IMF spurred players to reduce dollar holdings.

But dealers said they were still awaiting details of talks between IMF officials and Indonesian leaders, due on Thursday, to decide on the rupiah’s direction. It firmed to 7,800/900 per dollar at 0530 GMT against an opening low of 8,300. Dealers said its rise was being thwarted by dollar demand from Jakarta parties around the 7,500 level.

Elsewhere in Southeast Asia, the Thai baht was bolstered by comments from visiting US Deputy Treasury Secretary Lawrence Summers and an improving current account trend. The baht firmed to 53.35/55 to the dollar onshore against55.70/55.90 late on Tuesday. Offshore, it was sharply higher at 50.20/50 against 53.50/54.00.

The Malaysian ringgit was sharply higher at 4.3100/200 to the dollar against 4.6050/6350 late on Tuesday as US, European and Japanese banks unwound their long dollar positions, triggering stop-loss dollar sales.

The Singapore dollar rose to 1.7400/20 to the US dollar, well up from 1.7735 late on Tuesday. Reassuring words about Singapore banks’ bad loan exposure in the region also put a shine on the domestic dollar, but dealers said it faced a strong barrier at 1.7250.