The land developer said the sale of Impact shares would generate a profit of Bt2.86 billion, while the proceeds would be used for debt reduction and working capital.

In a statement to the Stock Exchange of Thailand, Bangkok Land chairman Anant Kanjanapas said 54.7 million shares would be sold for Bt127.99 apiece. The transaction is expected to be completed by the end of the year.

After the transaction, Impact, an exhibition- and convention-space provider, will buy a plot of land from Bangkok Land for Bt719.65 million. The purchase will be financed through new shares to be issued to Bangkok Land. This will make the share proportion sold to the buyer dilute to 40 per cent, from 42.22 per cent before the transaction.

The signing of the share sale and purchase agreement took place on Wednesday. The completion of the sale and purchase of the Impact shares is expected to occur by April 30, the company said.

Under the shareholder agreement between the two, so long as the buyer holds shares in Impact of not less than 30 per cent of the total issued, the buyer shall be entitled to appoint two directors to the Impact board, and Bangkok Land will be entitled to appoint three directors. If the buyer holds shares of less than 30 per cent, the buyer will appoint one director.

This shareholder agreement shall be terminated if the buyer holds shares in Impact amounting to less than 15 per cent of the total issued shares, the land developer said.

After the share sale, Impact will purchase from Bangkok Land 11,994 square wah of land for Bt719.65 million by issuing 7.2 million new ordinary shares to Bangkok Land.

Bangkok Land said that after the share sale, there would be no change in Impact's operations. The company will use the proceeds to repay debts from financial institutions at a discount and repurchase its foreign-currency bonds at a price lower than their face value.

The company said it expected to reduce its debts by Bt10 billion to Bt14 billion from its current total debts of Bt24.36 billion as per the consolidated financial statements of the company last December 31.

This will also reduce the company's interest expenses by Bt400 million to Bt500 million a year and the risk involved in fluctuations of foreign-currency exchange rates.