Q4

Siam Cement. Siam Cement, the Bangkok-based cement manufacturer, suffered enormous losses with the coming of the Asian crisis in 1997. The company had been pursuing a very aggressive growth strategy in the mid-1990s, taking on massive quantities of foreign currency-denominated debt (primarily U.S. dollars). When the Thai baht (B) was devalued from its pegged rate of B24.3/$ in July 1997, Siam's interest payments alone were over $900 million on its outstanding dollar debt (with an average interest rate of 8.16% on its U.S. dollar debt at that time). Assuming Siam Cement took out $53 million in debt in June 1997 at 8.16% interest, and had to repay it in one year when the spot exchange rate had stabilized at B42.6/$, what was the foreign exchange loss incurred on the transaction? The amount of the foreign exchange loss incurred on the transaction is B (Round to the nearest whole number.)