Foreigners eye SCIB stakes
Foreign investors still show a keen interest in acquiring majority stakes in Siam City Bank (SCIB), even though the Financial Institutions Development Fund (FIDF), the bank's major shareholder, does not plan to sell any of its stake to any particular investor.
"A number of foreign investors are keen to buy majority holdings in the bank. Some want to buy as much as 51 per cent, 75 per cent, even 100 per cent of the bank. However, the issue depends on the FIDF," SCIB president Arun Chirachavala said over the weekend.However, he declined to identify the investors. The FIDF is now the major shareholder of the country's sixth-largest bank. It holds a 47.6-per-cent stake, representing 1.005 billion shares. Meanwhile, SCIB's 25-per-cent foreign-ownership level has already reached its allowed ceiling. The Bank of Thailand earlier confirmed its position that it would not ease foreign-ownership restrictions in local banks like it did during the 1997financial meltdown. Recently, the FIDF announced a plan to sell SCIB and its shares in other state-owned banks to retail shareholders gradually. It wants to offload around 100 million shares this year via the Stock Exchange of Thailand. The announcement prompted selling of SCIB shares, whose share price dropped sharply. Concerning future sales of the bank shares, Arun offered a solution to offload them using covered warrants. "If I were the FIDF and wanted to sell SCIB shares [to foreign investors], I would sell them through covered warrants, so as to prevent a dilution effect," said Arun. Covered warrants would prevent the bank's share price from diluting. They also set specific conversion periods similar to warrants. When the conversion date is due, the warrants can become common shares. The central bank's 2003 rescue fund resorted to issuing new shares bundled with 740 million covered warrants (SCIB-C1). This was done to lower its stake in the bank through a privatisation programme, and these warrants were converted into shares in 2004. Oranan Paweewun Somrudi Banchongduang The Nation Guilin, China
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