Thainox told the Stock Exchange of Thailand (SET) yesterday that Prayudh or his group would sell 1.2 billion Thainox shares to Posco for Bt1.67 apiece.

"The purchase price was agreed on the basis of the net asset value per share, as shown in financial statements for the nine-month period ending September 30, 2006, which have been reviewed by the company's auditors," Thainox said.

The deal is subject to the approval of Posco's board of directors and expected to take place within 60 days.

SET data show that as of April 7, Prayudh held 1.94 billion shares of Thainox, or 24.2 per cent; Lakewood Land, which is wholly owned by Prayudh's family, 2.55 billion shares, or 31.87 per cent; Prayudh's son Chalermchai 429 million shares, or 5.36 per cent; Prayudh's daughter Usanee 183.26 million shares, or 2.29 per cent; and Lakewood Country Club, another family firm, 116.58 million shares, or 1.46 per cent.

Thainox shares rose sharply yesterday in response to the announcement, closing 14.6 per cent higher at Bt1.41 apiece.

The company conducted an initial public offering late in 2004 by selling 2.5 billion shares at Bt2.10 each.

Separately, Thainox reported Posco had agreed to be its main supplier of hot bands and also to act as its non-exclusive export agent for cold-rolled products for an initial period of two years, renewable for a two-year term.

The Thai stainless-steel manufacturer has agreed to purchase up to 80 per cent of its annual demand for hot bands from Posco, with a special discount for the high-volume purchase.

Posco will act as a non-exclusive export agent for Thainox's cold-rolled products, with a volume restricted to 40 per cent of the volume of hot bands purchased from Posco by Thainox. It will initially cover China, Japan and Southeast Asia.

By the end of the year, Posco is expected to have reached an iron-making capacity of 30.1 million tonnes and sold 28.6 million tonnes of its products.