11 July 2024

Billionaire Anne’s slide to bankruptcy

The meteoric rise and fall of Anne Jakapong Jakrajutatip, a transgender businesswoman, has been of epic proportions. Just a few months ago, she was flying high, having made global headlines when her company, JKN Global Group Public Company Limited, acquired the Miss Universe Organization (MUO).

Since then it has been a steady downward slide for Anne, who has been squeezed by a liquidity crunch due to high leverage. The crisis has forced her to sell a part of her business and the situation has culminated in her company filing for bankruptcy protection in November.

With a debt-to-equity ratio at almost two times, her business lacks the cash flow to meet its debt repayment obligations, which stems from previous corporate bond issuing.

Ambitious move

Anne, 44, has shown a risk-averse approach to doing business. Her ambitious move to acquire MUO at a price tag of 800 million baht in 2022 stunned observers. Anne’s aim was to leverage MUO as a key platform to sell her media content and many of her own lifestyle products.

Transitioning to a transgender woman, Anne is accustomed to dealing with challenges. Born in February 1979, “Pong” was the eldest son in a Thai-Chinese family of five children.

Anne attended an elite school in Bangkok and at 16 left Thailand to study in Australia, working a part-time job at a gas station. She earned a bachelor’s degree in international relations from Bond University.

She came back to Thailand and ran her family video rental business. Realising it was a sunset business, she began to import media content such as movies and documentaries and made a fortune from Indian movies sold to several local television channels. She soon got the name “Mother of  Billionaire Paratha”. It was also along this time that she began her gender transition. In an interview earlier this year, she said that in her earlier years she used to avoid social events and had no friends except her sister.

Anne was successful in listing her business, JKN Global Media, on the Market for Alternative Investment in 2017.  In 2021, she upgraded her business listing to the main board of the Stock Exchange of Thailand  (SET).

She continued to ride high on her media ambition, spending 1.1 billion baht to acquire TV digital Channel 18 in April 2021.

She also ventured into e-commerce business, buying a stake in an online shopping company in September 2021.

The big leap

Anne announced the acquisition of MUO in October 2022 from IMG Worldwide, LLC, a subsidiary of Endeavor Group Holdings Inc, for US$20 million, or about 800 million baht at the prevailing exchange rate. She said she spent about a year negotiating the deal before finally acquiring the famous business.

Former US president Donald Trump used to own MUO, but sold it in 2015 when he ran for US president.

Anne said that the previous owner had lost his passion for running MUO but found Ann had the passion to take over.

While some analysts questioned the price tag considering the declining interest in beauty pageants, Anne maintained that she had got a good bargain and expected to recoup the investment amount within a few years.

She also said she would use her MUO platform to drive Thailand’s soft power, which included food, fashion, festivals, movies and martial arts.

According to JKN, MUO has a 70-year history and is well known across the world with an estimated 500 million audience watching the annual beauty pageant. More than 90 countries send their national beauty contest winners to bid for the Miss Universe title, resulting in a royalty revenue stream from the exclusive rights to hold the beauty contest under the MUO brand in their countries.

Falling fortunes

As of March 23 this year, her shareholding in JKN group had fallen to 24.55 per cent from over 50 per cent previously, but she remains the largest shareholder status, according to the SET website.

During the period from 2019 to the first nine months of 2023,  her company achieved a combined revenue of 10 billion baht and accumulated profit of 1.5 billion baht.

Despite its profitability, her company has high debt,  shouldering total liabilities of 7.6 billion baht against shareholders’ equity of 4.8 billion baht in the first nine months of this year. Debt to equity (D/E) is 1.58 times, according to the company’s financial statement reported to the SET.

As a general principle, a business with a D/E ratio at less than 1 would be seen as relatively safe, whereas values of 2 or higher might be considered risky for investors and shareholders. JKN’s D/E last year was 1.8 times.

Anne also lives a colourful life, and according to some reports she has four boy friends concurrently. She also tends to flaunt her four luxury houses.

Point of bankruptcy

JKN filed for bankruptcy protection at Bangkok’s Central Bankruptcy Court on November 8.

Despite the financial challenges, Ann has managed to run her business activity as usual. The 72nd annual Miss Universe pageant was successfully held on November 18, 2023 at the José Adolfo Pineda Arena in San Salvador, El Salvador, where Miss Nicaragua Sheynnis Palacios was crowned the 72nd Miss Universe and Miss Thailand Anntonia Porsild finished first runner-up.

However, things are starting to heat up at home. A group of Thai investors, who had subscribed to corporate bonds issued by JKN, are demanding that the Securities and Exchange  Commission investigate her business as they suspect falsification of financial reports that misled investors about the company’s actual assets and liabilities.

By Thai PBS World’s Business Desk