TUF reports successful baht debenture issue toward debt refinancing
Thai Union Frozen Products, Thailand’s leading processor and exporter of canned and frozen seafood products, has successfully offered baht-denominated debentures to a group of institutional and wealthy investors.
This is the fourth time TUF has issued baht debentures since 2007. The proceeds from this issuance will be mainly used to refinance the portion of the company’s long-term debts that will come due this year as well as optimising the balance of its short- and long-term debts.
Company president Thiraphong Chansiri said TUF had successfully issued baht debentures of three-, five-, seven- and 10-year maturities, which had all been assigned an “AA-” rating by TRIS. Kasikornbank and HSBC have been appointed as joint lead arrangers for the debenture issuance.
“Despite the current market volatility, TUF has been able successfully to launch its first baht debentures of the year,” Thiraphong said. “This has clearly demonstrated investors’ high confidence in TUF. They indeed showed very strong interest during the book-building exercise.
“The demand was so overwhelming that the company exercised a greenshoe option to accommodate such strong demand, resulting in 4.5 times oversubscription. The oversubscription of this scale was considered very positive. In order to accommodate this strong interest, we therefore decided to increase the issuance size from the initial target of Bt6 billion to Bt8.25 billion.”
Boost in chicken exports seen
Exports of frozen chicken could reach 650,000 tonnes worth Bt80 billion this year, thanks to Japan’s announcement on December 9 that it would lift its 10-year import ban.
Surasak Riangkrul, director-general of the Foreign Trade Department, said exporters had been shipping frozen chicken to Japan since December 25. Thailand should be able to export a total of 100,000 tonnes of chicken to Japan, which would create income of Bt10 billion. This will increase export volume from the normal annual average of 550,000 tonnes worth about Bt70 billion.
Japan imposed the ban late in 2003 after some incidences of bird flu. Thailand used to have about a 30-per-cent share of the supply of chicken to Japan before the ban, but now Brazil enjoys a 90-per-cent share.
To ensure export opportunity, the department has advised exporters to focus on processed chicken and increased value-added for overseas supply. Many markets have high demand for imported chicken, including the United Arab Emirates, Hong Kong, Singapore and Malaysia.
SEC plans 3rd round of project
The Securities and Exchange Commission in cooperation with an alliance from both the public and private sectors has launched “Pride of the Provinces III” to ramp up provincial businesses’ fund-raising and capital-market knowledge. To participate, applications must be filed by May 31.
SEC secretary-general Vorapol Socatiyanurak said the Ministry of Interior, National Science and Technology Development Agency, Stock Exchange of Thailand, Federation of Thai Industries, Thai Chamber of Commerce, Investment Banking Club were cooperating in the endeavour.
“Pride of the Provinces III” aims to promote knowledge on capital markets and fund-raising to businesses nationwide. The project also supports intermediaries and professionals in capital markets such as financial advisers, auditors and securities companies in terms of expansion of their businesses throughout the country.
“Since the introduction of the first ‘Pride of the Provinces’ two years ago, 219 companies from 39 provinces nationwide have participated in the project,” Vorapol said.
“The SEC realises that wider participation will bring about more awareness, knowledge and understanding on capital markets as well as corporate governance, all of which will certainly be beneficial for improvement of provincial and family business management. As such, the SEC and our alliances continue the projects to help strengthen Thai businesses nationwide, which will eventually contribute to sound economic fundamentals and sustainable growth.”
Those interested in joining “Pride of the Provinces III” are required to have paid-up registered capital and shareholders’ equities of not less than Bt20 million, or be able to show either profit or retained earnings in their latest financial statements. In addition, they must provide advantages to their own provinces and be interested in raising funds through the stock exchange.
All the criteria are similar to those of the first two editions of the project.
Qualified businesses will be able to attend training courses on capital market, fund-raising and preparations for becoming a publicly traded company. Moreover, they can seek advice on IPOs and listing requirements from financial advisers, auditors, the SET and the SEC.
Participants obtaining the SEC’s approval for going public this year will be awarded a plaque honouring their achievement.
TFEX to downsize SET50 contract
The Thailand Futures Exchange will reduce the size of its SET50 futures contract on May 6 to increase liquidity of the product and reduce the capital outlay, enabling more investors to participate.
When TFEX started trading SET50 futures in April 2006, the SET50 Index was at its lowest point of around 300 points. The index has dramatically increased over time, reaching its highest point last year at 1,092.27, so the SET50 futures notional value had increased by more than three times. Also, SET50 Index fluctuation means that investors need to deposit higher margins in order to trade.
The new “mini-SET50 futures” will have a contract size one-fifth that of the existing product. The contract multiplier will be reduced from Bt1,000 per index point to Bt200 per index point, resulting in a drop in size to about Bt200,000.
Initial margins and exchange fees will be reduced by the same proportion, said TFEX managing director Kesara Manchusree.
Volatility on the SET likely to resume today
Volatility in the stock market is expected to continue today, despite the rise yesterday, according to Capital Nomura Securities.
Chai Chirasevenupraphand, chief strategist, said yesterday that the political uncertainties would weigh on market sentiment. The SET Index should move in the range of 1,280-1,300 points today.
The composite index yesterday gained 1.45 per cent to close at 1,292.81 points. Turnover remained thin at Bt25.8 billion. Foreign investors continued to flee the market with their sales outpacing purchase by Bt3 billion. Last month, the foreign net-sell position hit Bt13.67 billion.
Drop in new plants in Jan
New factories last month dropped 23.26 per cent year on year to 254.
Nattapon Nattasomboon, director-general of the Industrial Works Department, said yesterday that investors faced inconvenience in applying for permits to set up the factories following the seizure of state agencies by the demonstrators.
Another reason is the falling confidence of investors to set up plants, pending improvement in the political situation.
The number of cancelled businesses in January was 54 versus 120 in the same month last year.
The key factor that would bring back investor confidence is an end to the political conflict, he added.
AIS looks to 30m 3G clients
Advanced Info Service expects to end the year with 30 million 3G-2.1GHz subscribers.
Wichian Mektrakarn, CEO of the country’s leading cellular operator, said yesterday that
AIS has currently 37 million mobile phone subscribers, of which 15 million are using 3G-2.1GHz and the rest 2G. Its wholly owned subsidiary Advanced Wireless Network (AWN) holds the 3G-2.1GHz licence.
AIS is the largest 3G operator with more than 22,000 base stations for the nationwide 3G-2.1GHz network, which is set to reach over 24,000 by year-end.
True Corp has about 15,000 3G base stations nationwide and expects to reach about 20,000 by year-end.
Of the present 15,000 stations, 13,500 are for the 3G-850MHz nationwide network and the rest for the 3G-2.1GHz network. The latter is expected to reach 6,200 at the end of this year, according to the National Broadcasting and Telecommunications Commission.
Last week the NBTC awarded 9.9 million mobile phone numbers to AWN, which has 24 million at this time.
Wichian said the mobile phone service business would be affected in the long run by the slowing economy, so the company has adjusted its revenue growth target this year. He declined to elaborate.
Statoil, PTTEP in agreement
Statoil and PTT Exploration and Production Plc have signed an agreement to divide their interests in the Kai Kos Dehseh oil sands project in Alberta, Canada.
Both companies believe the best way to maximise the value of the KKD leases is to divide ownership.
“This allows each company to develop the assets at their own pace,” Stale Tungesvik, president of Statoil Canada, said in a statement last week.
This transaction allows for PTTEP to adjust its portfolio and the timing of its capital expenditures, based on the current market situation, to achieve optimal investment returns.
It is also an opportunity for each party to pursue its own strategic direction, said Tevin Vongvanich, president and CEO of PTTEP. Statoil entered Kai Kos Dehseh through the acquisition of North American Oil Sands Corp in 2007, and in 2011 PTTEP farmed into a 40-per-cent interest in KKD, with Statoil remaining as the operator.
The Leismer project is the first phase of the SAGD (steam-assisted gravity drainage) full field development of KKD. Leismer is currently in production and has an operating capacity of 20,000 barrels per day.
A final investment decision for the Corner project had been scheduled to be made in the first part of this year, but the parties have agreed to postpone this until the closing of the transaction.