A merger between Mida Assets and DE Capital is a growing possibility, because the former has become the latter's second-largest shareholder, Mida Leasing chairman Wiwat Theekhakhirikul said yesterday.

He said Mida Assets' stake in DE Capital had been raised to 7.84 per cent and Mida Assets' major shareholder Kamol Ieosivikul appointed DE Capital's managing director. These moves give substance to earlier rumours of a merger between the two companies, but any such move would be made in the best interests of the shareholders.

"Whether Mida Assets is planning to buy additional shares in DE capital [is a question] for Mida Assets," said Wiwat.

Wiwat, who is currently DE Capital's chairman and director, was also DE Capital's acting managing director until Kamol took over the post on Monday. He said he could not say whether he would resign as DE Capital's chairman and director, because that would depend on the shareholders.

Distar Electric is DE Capital's largest shareholder, with a 22.33-per-cent stake as of last March.

After taking office as DE Capital's managing director, Kamol said he would evaluate a merger between Mida Assets and DE Capital over the next three months. Meanwhile, solving DE Capital's bad loans is his first priority.

"I'll start working next week," he said. "I have already studied the company's viability, and the first thing I will do is solve the bad loans so we can obtain cash."

The cash will be invested in other businesses.

"Initially, the company will invest in other companies under the same umbrella. I can't provide details, because it's unclear at the moment," said Kamol.

DE Capital's debtors can be classified into three types: electrical-appliance hire-purchase debtors, auto hire-purchase debtors and dealers.

Following business restructuring, DE Capital will be able to swing back into net profits within the next two years, said Kamol.

In the first nine months of last year, it recorded a net loss of Bt22.94 million, compared with a net loss of Bt38.94 million in the same period in 2005.

The company will revitalise a recent board of directors' resolution to offer free warrants to shareholders as a source of funding and to provide returns to shareholders, he said. If the board approves the warrant issue, the warrants will be available to shareholders in April or May.

Siriporn Chanjindamanee

The Nation