After the transaction is complete, the SSI stake in TCRSS will increase to 40.14 per cent from 8.77 per cent.

The company said in a statement to the Stock Exchange of Thailand yesterday that the two Japanese shareholders were JFE Steel Corporation, an existing shareholder of TCRSS, who will sell 171.25 million shares of TCRSS divided into 109.41 million common shares and 61.85 million preferred shares, and Marubeni Corporation, an existing shareholder of TCRSS, who will sell 164.54 million shares of TCRSS

divided into 105.12 million common shares and 59.42 million preferred shares.

Win Viriyaprapaikit, SSI's president, said in the statement that the acquisition would support SSI to be a vertically integrated flat-steel producer in Thailand from midstream to downstream.

SSI can also enhance its competitive edge over local hot-rolled coil producers in that SSI is able to secure the distribution of premium-grade hot-rolled coil to be used for cold-rolled coil products, benefiting its inventory management in the long run.

The source of funds to finance the investment will be local financial institutions. TCRSS was established by a group of Thai partners including SSI and a group of leading Japanese steel companies, mainly JFE Steel Corpora-tion and Marubeni Corporation, in November 1995.

With paid-up capital of Bt10.7 billion, JFE Steel Corporation, Marubeni Corporation and SSI are still major shareholders, with shares of 38.42 per cent, 37.57 per cent and 8.77 per cent, respectively.

TCRSS's main business is to manufacture and sell cold-rolled steel sheet for various purposes such as for use in the automobile industry, electrical appliances, furniture, construction and the coated sheet industry.

At present, TCRSS's production capacity is 1.2 million tonnes per year, with all production being at its plant in Prachuap Khiri Khan.