Bangkok: Thoresen Thai Agencies is clearly a firm believer in the old maxim: ‘If at first you don’t succeed, then try again.” Yesterday, it announced plans for a capital increase to raise up to THB 6.37bn over a 30-month period through a rights offering and the issuance of stock warrants. This follows shareholders turning down an earlier attempt to raise cash via new shares.
The key uses of the new capital, announced yesterday, include Thoresen Shipping's fleet expansion plan through the purchase of new and second-hand vessels and potential renewal of the drilling rig fleet at TTA's offshore oil and gas services subsidiary, Mermaid Maritime.
All shareholders will be entitled to exercise their rights by subscribing to two newly issued shares at a price of THB 14.00 per share for every five existing shares they own. Free warrants will be issued only to those shareholders who subscribe for new shares at a ratio of one warrant to two newly subscribed shares. Each warrant can be converted into one common share at an exercise price of THB 17.00 within 30 months of the warrant issuance. The subscription period for the RO has been set from 21-28 February 2013.
Unsubscribed shares will be allocated to shareholders who subscribe to excess rights at the same price of THB 14.00 per share and up to a limit of 0.5 times their current holdings. Any remaining shares after the distribution of excess rights may be allocated to a private placement in one or several tranches. The capital increase proposal is subject to shareholder approval at TTA's Annual General Meeting of Shareholders, which will be held on 30 January 2013.
TTA Director and shareholder Mr. Chalermchai Mahagitsiri stated, "We have evaluated our business needs carefully, and there is little doubt that making timely investments in TTA's core business today will bring significant returns in the future. While I was committed to the original capital increase plan, I respect that the views of other shareholders differed on its structure and execution. As a result, the Board and management have worked closely together to adjust the structure to a ratio of five-to-two coupled with warrants, which will raise less capital but can still support our investment requirements, with some adjustments. I put my full support towards this plan, which I believe reflects the views of the majority of the Company's shareholders, and plan to exercise my full rights."
TTA expects to raise up to THB3.97bn in immediate funds from the rights offering, and up to THB2.4bn over the next two and a half years from the exercise of warrants, for a combined total of up to THB6.37bn.
"The proposed capital increase structure, which has been revised following the invaluable feedback we received during our recently held Extraordinary General Meeting of Shareholders, hopefully addresses the various concerns of our shareholders while still fulfilling TTA's investment requirements," added M.L. Chandchutha Chandratat, TTA's President & CEO.
Thoresen Thai Agencies’ plan to fund a raft of new ships via $323m in new shares was torn up in the middle of this month as shareholders vetoed the cash-raising exercise. [26/12/12]