THAI BEVERAGE tycoon Chareon Sirivadhanabhakdi’s heirs will invest Bt850 million to acquire 200 million newly issued ordinary shares in Amarin Printing and Publishing in the wake of a massive revenue decline in printed media and fierce competition in the digital TV business.
The 40-year-old Amarin Printing told the Stock Exchange of Thailand (SET) that it would issue 200 million new ordinary shares, with a par value of Bt1 per share, to be allocated and offered in a private placement to Vadhanabhakdi Co, which is owned by Thapana and Panote Sirivadhanabhakdi, sons of Thai billionaire Chareon.
The offering price is Bt4.25 per share with the total sum being Bt850 million.
Once this tender offer is completed, Vadhanabhakdi Co will become the major shareholder with 47.6 per cent shares of Amarin, leaving a 30.8-per-cent equity stake for Amarin’s current major shareholder.
An extraordinary shareholders’ meeting will be held on February 10, 2017 to deal with the capital increase plan.
The plan will boost the company’s registered capital from Bt219.99 million to Bt419.99 million.
The company said it needs funding for additional investment in its digital TV business, which was in the start-up phase and had high operation costs. It also has to pay a licence fee for the frequency spectrum for digital television services, plus it has bank loans to repay.
Fresh funds will also be used as working capital for business operations and the production of television programmes.
Given the high level of competition in the digital TV business, the company viewed that having a strategic partner who has financial resources and expertise was good for future business as it has faced losses for the past two to three years.
This has affected its liquidity and working capital base while its debt-to-equity ratio as of September rose as high as 4.3:1
Wannee Ruttanaphon, chairwoman of IPG Mediabrands, a leading media agency, said the deal was a win-win because Amarin had suffered financially from its digital TV business. It needs new funding to cope with the high investment requirement, as well as the cost of the digital TV licence.
Moreover, the company has faced a decline in advertising spending in printed media. Last month, advertising in newspapers fell by 26.5 per cent to Bt773 million while magazine ads dropped by 38 per cent to Bt231 million.
Regarding the new strategic partner, it is involved in a diverse range of business interests – from foods and beverages, consumer goods, the retail business and the property sector – and would benefit from Amarin’s multiple media channels and expertise.
Chalakorn Panyashom, chief operating officer of Workpoint Entertainment, the operator of Workpoint’s TV digital channel, said that he was not surprised because he has also seen other players in the digital TV business face a similar business situation.
Advertising spending via both newspapers and magazines has declined continuously over the past five years (Bt million):
2016 (as of October) 8,164
2016 (as of October) 2,510
Sources: Nielsen Thailand, ThaiPublica.org
Compiled by The Nation