• 
• 

Published on March 8, 2008

Ticon Industrial Connection plans to issue debentures worth Bt500 million to Bt1 billion to raise funds for dividend payments.

Managing director Varapan Pulges yesterday said the company was conducting a feasibility study to raise funds for dividend payments of about Bt800 million. As the coupon rate could be around 4 per cent against low deposit rates, it is worthwhile to borrow to pay for the dividend rather than using internal cash flow.

He said the issue should be finalised in April or May. The bonds will carry 35 years of maturity.

Varapan said Ticon's cash flow would generate a return of 20 per cent if invested in building new factories, while a warehouse could generate 15 per cent.

The company this year plans to expand its factory space by 120,000-130,000 square metres with an investment of Bt3 billion, he added. It also targets increasing its warehouse space by 100,000sqm, resulting in combined factory and warehouse space of 685,000sqm.

"Foreign investors now have greater confidence in the country's economy since the government was elected. This can be seen from a larger amount of space in manufacturing plants being rented by foreign investors," he said.

In addition, the government's removal of the 30-per-cent capital-reserve requirement has favoured the Ticon Property Fund (T-Fund). Foreign investors can now invest in the fund, which could not previously be sold, said Varapan.

He said Ticon's major clients were in the electronics, auto parts, logistics, food and garment industries. These clients are from Japan, Singapore, the United States, Canada, the European Union, Taiwan and Thailand.

Varapan said that following its space expansion, the company expected revenues this year to increase by 10 per cent from Bt3.52 billion last year.

Net profit is expected to be the same as last year at Bt17 million due to the lack of returns from the T-Fund.

The company's forecast revenue breakdown this year is primarily 60 per cent from sales of assets to the T-Fund, 20 per cent from rentals, 12 per cent for sales of factories for rent, and 2 per cent in dividends from the T-Fund.

Varapan added that in the second half of the year, the T-Fund plans to invest Bt2.7 billion to Bt2.8 billion more in acquiring assets from other plant owners.

This year, the fund's assets are expected to grow by 10 per cent to Bt6 billion.

Siriporn Chanchindamanee

The Nation