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Published on September 6, 2007

The plan by Union Footwear (UF) to delist its stock from the Stock Exchange of Thailand (SET) has been derailed after shareholders with 67.12 per cent of the company's paid-up capital voted against it.

The company said in a filing yesterday with the SET that shareholders with 13.43 million shares, representing 87.26 per cent of the total voting rights, or 67.12 per cent of the company's paid-up capital, voted against the delisting plan.

Of the company's total shares, 10.6 million are held by major shareholders. These account for 68.91 per cent of total voting rights, or 53.01 per cent of paid-up capital. The rest are held by minor shareholders and constitute 18.35 per cent of total voting rights, or 14.11 per cent of paid-up capital.

Those holding 1.94 million shares voted to support the delisting. Holders of 18,000 shares abstained from voting. The SET will not interfere in the about-face, which reverses the decision to delist by Union Footwear's board, said SET president Patareeya Benjapholchai.

The company announced last month it would discontinue its business, having suffered continuous losses exacerbated by the strong baht. Major shareholder Saha Union planned to launch a tender offer to purchase the remaining shares to delist Union Footwear's stock from the Thai bourse.

The footwear manufacturer posted a first-half loss of Bt456 million, with a deficit of Bt134 million in shareholders' equity.

Patareeya said the SET was now talking to Union Footwear, looking for ways to turn the company around. This may involve selling off the majority of its shares - the 50.52 per cent held by Saha Union and its group - to new investors.

She said Union Footwear could be placed on the rehabilitation list if it failed to drag itself back into the black.

Union Footwear pointed out in yesterday's filing that shareholders with 15.38 million shares voted in favour of the company's plan to cease its footwear operations. Holders of only 6,000 shares voted against the shutdown.

Shareholders approved a decision by the company's board to accept financial support from Saha Union, which will endorse a commercial guarantee of letters of credit or trade receipts with banks in the amount of Bt160 million and also provide Union Footwear with a Bt180-million loan.

 Ki Nan Tsui

 The Nation