Traffic plan completed in early Feb

In October, the board of the listed company resolved to increase capital by issuing 240 million shares to existing stakeholders at a ratio of two new shares for each existing one at Bt1.79 apiece - well below the current price of Bt20.30.

The capital increase is to fund the amalgamation of Traffic Corner with M Pictures, a 79.99-per-cent subsidiary of Major Cineplex Group.

Surapong Triumchanchai, an adviser to the merger, yesterday said there were three options for the capital-increase plan.

The choice is up to Traffic Corner's shareholders, he said.

The first option is for shareholders to fully subscribe to Traffic Corner's new shares, where Bt429.6 million will be mobilised and sufficient to buy up the 79.99- per-cent stake in M Pictures, he said.

Using this method, Traffic Corner would not be compromised as Major Cineplex does not hold any stake in Traffic Corner, he added.

The second and third options are for Traffic Corner's existing shareholders to partly subscribe to the capital increase or not subscribe at all.

If Traffic Corner does not subscribe, Major Cineplex would then acquire 184 million shares to become the company's major shareholder with a stake of 51 per cent to 59 per cent.

The remaining new shares can be used to swap M Pictures shares.

Should Traffic Corner shareholders subscribe to a portion of the new shares, Major will subscribe to the amount outstanding.

"If Major takes less than 51-per-cent stake in Traffic Corner, the deal may collapse. I think that the best case is allowing Major to become Traffic Corner's major shareholder and we also get M Pictures," Surapong said.

Siriporn Chanjindamanee

 The Nation