Bangkok: With some relief the management at Thoresen Thai Agencies have reported shareholders at its AGM yesterday voted in favour of the company’s capital increase plan, which aims to raise up to THB6.37bn.
It was the second time of asking for TTA as shareholders did not return a big enough majority in favour at an earlier plan voted on in December.
TTA plans to use the proceeds of the capital increase to invest in new and second-hand vessels for its dry bulk shipping subsidiary, Thoresen Shipping Singapore, and to support the potential growth plans of its oil and gas services subsidiary, Mermaid Maritime.
Prasert Bunsumpun, TTA’s chairman of the board, said the company now had “a clear rationale to make timely, opportunistic investments in TTA’s core businesses”.
Echoing these thoughts was TTA director Chalermchai Mahagitsiri, who said: “There is no better time to make these investments than the present”.
Following the approval of the plan by 95.4028% of attending shareholders, all existing TTA shareholders will be entitled to exercise their rights by subscribing to two newly issued shares at a price of THB 14.00 for each five existing shares they hold during the subscription period, which will be from 21 February to 28 February 2013. In addition, free warrants will be issued to all shareholders who subscribe to new shares at a ratio of one warrant to two newly subscribed shares. Each warrant can be converted into one new share at a price of THB17.00 within a 30-month period. Unsubscribed shares will be allocated to shareholders who subscribe to excess rights at the same price of THB14.00 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.
Proceeds will be used to purchase additional newbuild and second-hand dry bulk vessels.
“Vessel prices have fallen by over 30% compared to a 10-year average in the five-year-old supramax category and by over 70% compared to the height of the dry bulk shipping cycle in 2008,” TTA said in a statement released this evening.
“Likewise for newbuild supramax vessels, the price today stands at between US$24m and US$27m, about 20% lower than the average price of a newbuild vessel over the past 10 years,” TTA added.
In fiscal year 2012, Thoresen Shipping contributed a positive normalised EBIT of THB118m despite, what the company described as “a prolonged industry downturn”, with TTA saying its Singapore owning division outperformed the market “in terms of both operating costs and freight rates”.
TTA is also exploring opportunities to invest in additional offshore services assets in Mermaid given recent contract awards already securing backlog against available assets and clients showing preference for modern assets.
Tender drilling rigs of five years of age or younger, according to TTA, have recently reported utilisation rates close to 100%, with day rates approaching $120,000. Mermaid’s turnaround in fiscal year 2012, which was highlighted by a 138% rise in normalised EBIT compared to the previous year, was further buoyed by the signing of a $530m five-year inspection, repair, and maintenance services contract, which it completed with a joint venture partner in October 2012. Meanwhile, Asia Offshore Drilling Limited (AOD), in which Mermaid holds a 33.75% stake, recently won its inaugural contract for the first of its three high specification jack-up drilling rigs, valued at $236.5m over three years. Both contracts were signed with Saudi Aramco, the world’s largest oil and gas company, underscoring Mermaid’s success in expanding its geographic footprint beyond Southeast Asia into high growth regions including the Middle East. [31/01/13]
