The chairman of Peregrine Investments Holdings, Philip Tose, says liquidators will have to sell surviving parts of the business within 10 days or face a significant deterioration in their value. Addressing some of the firm's 700 staff in Hong Kong yesterday, he also said they 'should keep the spirit of Peregrine alive'. Mr Tose made the comments before addressing a packed press conference where he and Peregrine's managing director, Francis Leung, choked back emotions as they outlined the circumstances leading up to the company's demise. Mr Tose blamed the regional currency crisis. He made little mention of the role played by Peregrine management in the months leading up to the recent disclosure of a US$260 million (HK$2.01 billion) loan to an Indonesian taxi company, Steady Safe. He also would not discuss other possible exposures the firm may have to turbulent Asian markets. Mr Tose said although the firm had been hit by the region's general decline, it was the slide of the Indonesian rupiah from 5,000 to 11,000 to the US$ which pushed the firm over the edge. As part of efforts to secure the company's position, the balance sheet was reduced from US$5.3 million last June to about US$3.2 billion in July through the disposal of 'various assets'. He said Peregrine had a 'verbal agreement' and was within hours of signing a 'preliminary agreement' with Zurich Insurance before the rescue plan was scuppered by the crash of the rupiah. First Chicago, which was negotiating to buy a 2.4 per cent stake, withdrew a US$60 million loan which was in effect an emergency line of credit. The failure to receive these initial emergency funds triggered a rash of loan defaults. This left Zurich with little choice but to pull out of a plan to buy a one-third stake for US$275 million, under revised terms. Mr Leung, who broke down at one point while answering questions, did not deny that he might lead a management buyout of the firm's securities business - which will be a prime disposal target for liquidators. Several mainland companies are actively pursuing the purchase of this and the corporate finance arm through discussions with accounting firm Price Waterhouse, which was yesterday formally appointed as liquidator. The value of both businesses will depend heavily on the firm's ability to hold key employees. Mr Tose believed protracted negotiations for a sale would heighten the possibility of voluntary staff departures.