Singha expands property arm via share-swap deal with Rasa
April 17, 2014 00:00 By
SINGHA CORPORATION and its major shareholder Santi Bhirombhakdi are undertaking a back-door listing in the Stock Exchange of Thailand by acquiring Rasa Property Development.
Singha’s business diversification into the property sector is in line with the policy set by Santi, who is also the group chief executive officer, to double the sales contribution from its non-alcohol businesses to 30 per cent by the end of this year, from only 15 per cent in 2011. It is also in line with the company’s business direction set to diversify into two new business pillars – real estate and energy.
Entering new businesses with good potential will allow the group to offset a domestic decline in beer sales due to government restrictions, including those on advertising of alcoholic beverages.
Rasa’s board reported to the SET last Friday that Singha Property Management and Santi would buy 4,162,352,331 new shares at Bt1.87 each, totalling Bt7.78 billion, in Rasa via a share swap. The board approved the deal, which was set up last December, late on Friday.
Rasa will ask its shareholders to approve the plan on June 9 for subscription to Singha Corp the following day.
After Singha Corp acquires the new shares, it will hold 90 per cent of Rasa Property Development, which will increase its registered capital from Bt550 million to Bt4.6 billion.
According to the deal, Singha Property Management Co will hold 1,932,405,807 shares worth Bt3.61 billion in Rasa Property Development by swapping shares of its subsidiary S Bright Future Co for Rasa’s new shares, said Rasa managing director Rapi Pinijchob. Singha Corp set up S Bright Future in December last year.
Santi in swap
The rest of Rasa’s new shares, totalling 2,932,405,807 and worth Bt5.48 billion, will be held by Santi, who will swap his shares in Santiburi Co with Rasa’s new shares.
Santi is a major shareholder in Singha Property Management, a property arm of the brewery giant. Singha Property Management is also a major shareholder in S Bright Future.
After the deal, Rasa Property Development will hold a major stake in both S Bright Future Co and Santiburi Co, while both S Bright Future and Santiburi will also hold major stakes in Rasa.
Rapi said the deal would be completed after at least 75 per cent of Rasa shareholders who are not stakeholders in the deal vote to approve it at the extraordinary shareholders meeting on June 9. Then the name of Rasa Property Development would be changed to Singha Estate Plc.
“After that Singha Corp will control and manage the company,” he said.
Rasa is a developer of residential projects and office buildings. The company reported revenue of Bt483.85 million and net profit of Bt23.13 million last year.
Rasa Property Development’s shares closed yesterday at Bt2.92, up 66 satang per share or 29.20 per cent from Friday.
Last December, Singha Group established two property firms, S Bright Future with registered capital of Bt4.13 billion and Singha Property Management with registered capital of Bt2.07 billion. Santi Bhirombhakdi and his nephew Chayanin Tepakam are major shareholders of both companies.
Chayanin, who is in the fourth generation of Bhirombhakdi family and now vice president at Singha Corp, will be in charge of the new property business.
Singha Corp in 2011 won an auction to acquire a 9-rai plot of land on Bangkok’s New Phetchaburi Road, previously occupied by the Japanese Embassy. It has also purchased a 1-rai plot from the Japan International Cooperation Agency. The 10 rai (1.6 hectares) of land has been developed into a mixed-use complex comprising a condominium, an office building and a shopping mall. Santi himself wants to develop the complex into a new Bangkok landmark and tourist destination.
Singha Corp director Phurit Bhirombhakdi said previously that mergers and acquisitions would be considered as short-cut process in the group’s diversification into businesses such as property.
“Currently, we cannot start such businesses from the ground up, but can synergise or take up partnerships with existing professionals and experts in the businesses, so that they can help us speed up our business expansion,” he said.