VGI Global Media has spent Bt5.9 billion to buy a 23 per cent stake in Kerry Express (Thailand) Ltd, a domestic express delivery service, according to a filing with the Stock Exchange of Thailand (SET) yesterday.
A source close to the deal said that some of the funds for the stake acquisition would come from borrowings from Bangkok Bank Plc.
“We had wanted to buy a 30 per cent stake in Kerry Express (Thailand) but its major shareholder, which is also a listed company in Hong Kong, declined to sell part of its stake in the company,” he said.
“As a result, we began buying the shares of minority shareholders until we reached the 23 per cent mark.”
According to the company’s report to the SET, it is expected that there will be closer business cooperation between the company and Kerry Express (Thailand). Among others forms of cooperation, Kerry Express (Thailand) will become the only express logistics partner of the company and the Bangkok mass transit system (BTS Skytrain) and shall be granted the right to officially use the BTS Skytrain to carry out its express delivery services subject to conditions agreed by the parties.
In addition, Kerry Express (Thailand) will have the first right of refusal to set up shops, kiosks, counters any other service points in all BTS Skytrain stations for parcels and/or goods collection and pick-up, the company’s statement to the SET said.
The company’s directors, Marut Arthakaivalvatee and Chan Kin Tak, also reported to the SET that the company will be granted the right to manage the new advertising spaces, such as on Kerry’s vehicle delivery fleet, shops and points of service, as well as offering product sampling with express delivery services provided by Kerry.
Its main customers and logistic platform will boost the company’s offline to online media solutions business in response to the rapid growth of online transactions and media.
The investment in Kerry Express (Thailand) would also diversify the company’s business and enhance the company’s regional growth opportunities, they said.
The source close to the deal said that the company would not replace all of the management positions in Kerry Express (Thailand), but added the company needs to benefit from collaboration in order to drive business growth this year.
VGI this year announced that, under its business plan, it aims to post growth of more than 20 per cent a year.
In its first nine months of its 2017-18 fiscal year (from April 1 to December 31, 2017), the company reported total revenue of Bt2.86 billion and net profit of Bt558.02 billion.