Nation Group poised to issue Bt2-billion debentures

The Nation group will issue debentures worth Bt2 billion to provide funds for working capital and further business expansion, as well as to reduce debt.

Nation Multimedia Group (NMG), which is the group's parent company, will issue a debenture not exceeding Bt1.5 billion for working capital and to reduce its debt, while Nation Broadcasting Corp (NBC) will issue a debenture with a maximum value of Bt500 million to fund working capital and further expand its business.

NMG president Duangkamol Chotana said that last year the company had continued to restructure its financial performance and it was now sufficiently healthy to raise funds to cater to business expansion.

She expects the planned NMG debenture will earn a good rating from Tris Rating Agency at a level higher than "BBB", given the company's healthy financial performance last year.

The debenture issuance will enable NMG to cut its financial costs, which currently stand at 7 per cent.

If the debenture carries a rate of 5 per cent, this will help NMG save interest expenses of Bt20 million per year, or Bt100 million over five years.

NMG also announced an 87-per-cent jump in 2012 net profit to Bt191.3 million, while revenue rose 11 per cent to Bt3.1 billion.

The ratio of debt to EBITDA (earnings before interest, tax, depreciation and amortisation) dipped to 9.21 in the fourth quarter of last year, while the debt-to-equity ratio was 0.99.

Three group companies will mobilise more than Bt2 billion by June to participate in the country's first digital-TV auction and launch expansion projects that will position the group as a "game changer" in the fast-developing media landscape.

NMG, NBC and Nation International Edutainment (NINE) recently filed their recapitalisation plans with the Stock Exchange of Thailand, which will see new shares and warrants issued.

NMG will bid for a variety channel, NBC for a news channel and NINE for a children's channel in the digital-TV auction.

Duangkamol added that while proceeds from the NMG debenture would be used for reducing debt, the remaining proceeds from the two issues, when combined with the plan to mobilise Bt2 billion in new capital, would give the Nation group strong funding to further expand business and foray into the digital-TV arena.

NMG and NBC will seek approval at their ordinary shareholder meetings in April to issue the debentures and increase registered capital.