Set halts sale orders for tucc shares

Orders to sell Thai Unique Coil Centre's (TUCC) 71 million shares, representing 30 per cent of its paid-up capital, were halted by the Stock Exchange of Thailand yesterday.

The exchange's computer system had been wired to halt such sell orders for a stock that exceeded 30 per cent of its capital in a single day.

This would allow it time to check to see if the orders were correctly placed before they could be transacted, SET vice president for market surveillance Somsri Nittayasakd said.

The limit was set at 30 per cent as most listed firms have a free float of 25 per cent, she said.

But TUCC's case may appear "normal" as its free float was 49.12 per cent, she said. A broker said the sale offer yesterday could have resulted from a situation when there were more sellers than buyers, trying to dump a falling share.

The stock plunged to its 30-per-cent floor price since in early trade.

The sharp slump in its price was expected to spur further attempts to offload it, he said.

TUCC had tumbled "limit

down" 30 per cent for two straight days.

It had lost 67.38 per cent of its value from its peak of Bt13.55 on February 7 this year to Bt4.42 yesterday.

There was a rumour of a "forced sale" by a big investor who was also a former deputy minister.

A forced sale is triggered when an investor, buying on margin, fails to cover his losses. As such, his broker then liquidates a portion of his portfolio to offset the outstanding amount owed.

According to SET data as of April 4, TUCC chief executive officer Yongyuth Ngamkaiwan held 131.83 million shares or 52.11 per cent while Vatcharee Ngamkaiwan owned 4.84 million shares or 1.91 per cent.

Manit Panyo was TUCC's second-largest shareholder, holding 3.65 per cent.

A brokerage source said TUCC executives were concerned some shareholders might have "oversubscribed" to the company's capital increase.

 "Some shareholders had subscribed to 10 million newly issued shares, when they can buy only 5 million shares," he said.

"The company's executives are concerned and asked the Securities and Exchange Commission (SEC) and the SET to delay the subscription period.

"But both requested TUCC to abide by the schedule," he said.

The subscription period runs though today.

Under the move, TUCC will issue 316.25 million shares, 126.5 million shares of which had been offered to existing shareholders at a ratio of two old shares for one new, for Bt2.50 each.

About 189.75 million shares will be reserved for warrant conversion.

TUCC, a stainless steel manufacturer and distributor, recorded net profits of Bt16.95 million in the first quarter and Bt30.67 million for last year.