Published on June 24, 2005

Top Singaporean financial company in bid to break into Thai market

International Factors (Singapore) has agreed to a 10-per-cent equity stake in Thailand’s Advance Finance, increasing to 49 per cent later, subject to approval by local authorities.

Advance Finance, previously known as Global Thai Finance, plans to list on the Stock Exchange of Thailand in the next three years. It was formed as a result of a management buy-out in 2004 from Lehman Brothers, a leading US investment bank.

International Factors (Singapore) (IFS), a top Singaporean financial firm, said it would use Advance Finance as a platform for business expansion in Thailand through cross-border raising of capital and structured finance.

Advance Finance may also expand into leasing, hire purchase and private equity. The firm already has a joint venture engaged in factoring in Thailand.

Daranee Huachai, CEO of Advance Finance, said the firm had been looking for strategic investors to strengthen shareholder structure, in a bid to support future business expansion.

“International Factors was the perfect candidate for partnership, because it has strong shareholders, including Phillip Assets, which is a part of PhillipCapital,” she said.

In addition to the IFS stake in Advance Finance and its potential increase in shareholders, the company is in the process of reducing the management’s shareholding to an appropriate level. It will increase the number of Thai institutional and individual investors that have synergy value to the company in a move expected to be completed by the end of the year.

The IFS Group offers factoring, loans, leasing, structured finance, credit insurance and guarantees, as well as a broad range of financial services. In 1993, IFS was listed on the main board of the Singapore Stock Exchange.

As of last December, IFS had assets of S$415 million (Bt10.2 billion), profits of S$8.1 million and shareholders equity of S$95.8 million.

“This investment demonstrates IFS confidence in the Thai economy and is another step towards realising regional ambitions for IFS expansion. Advance Finance was chosen as strategic investment because of the growth potential and a dedicated management team,” said Lee Soon Kie, CEO of IFS.

He said that although IFS currently has operations in Thailand through Ayudhya International Factors in a joint venture with Bank of Ayudhya, the intention was for AIF to focus on factoring.

Advance Finance plans to list its shares on the main board of the SET in the next three years.

It currently focuses on direct lending, mortgage and real-estate financing and structured finance.

In the last nine months of 2004, Advance Finance’s total assets grew to Bt4.35 billion, from Bt1.54 billion previously; revenues to Bt168 million, from Bt98 million; loan growth to Bt2.83 billion, from Bt1.23 billion; deposits to Bt3.66 billion, up sharply from Bt948 million; and profits to Bt60.7 million, from Bt1.9 million. Shareholder equity is Bt622 million.

Advance Finance said it expects a profit of Bt70 million this year and strong earnings growth.

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