Veteran exec leads Osotspa
Kannikar
Chalitaporn has a unique claim to fame: she’s helped transform not one but two century-old Thai firms. The latest, energy drink maker Osotspa Plc, is set for the nation’s largest corporate listing of 2018.
The 127-year-old company and current shareholders raised about 15.1 billion baht in an initial public offering (IPO), the top end of the pricing range, Osotspa said in a statement. The deal values the stakes of chief executive Petch Osathanugrah and his family at about $1.5 billion, data compiled by Bloomberg show.
The IPO price is 25 baht per share for the offering of 603.75 million shares, or 20.1% of total registered capital.
The company hopes to raise funds worth 12.7 billion baht for construction of a beverage factory in Myanmar.
“Osotspa already has very established brands and products,” said Mrs Kannikar, Osotspa’s vice-chairman.
“What I’ve done is implement a broad transformation strategy to ensure future growth in a fast-changing environment.”
Osotspa’s M-150 beverage is Thailand’s most popular energy drink, with a 46% market share, according to researcher Euromonitor International.
Mrs Kannikar, 70, said she counselled the company to focus on its strengths, such as the beverage and personal care products businesses, to help ensure a successful listing.
As part of that process, Osotspa sold or closed less profitable divisions, including advertising and distribution operations.
“Bringing in some key professional talent also helped enhance the organisation,” she said.
The energy drink industry was arguably founded in Thailand, where blue-collar workers are often seen downing multiple bottles of M-150 against the Southeast Asian nation’s sweltering daytime heat.
Thai drink makers are now looking beyond their more mature home market, where growth opportunities are limited, to tap into demand elsewhere in the region.
Osotspa intends to use the proceeds from the listing to fund domestic and overseas expansion, including construction of a factory in Myanmar.
“The main growth potential is in neighbouring countries, where youthful consumers and climbing incomes are spurring demand,” said Chakrit Puechpan, fund manager at MFC Asset Management Co, which oversees about $14 billion of assets.
While Osotspa’s domestic market share has been declining, it’s still some way ahead of second-place Carabao Group Plc’s 29%, Euromonitor data shows. T.C. Pharmaceutical Industries Co’s version of Red Bull is third with 13%.
Mrs Kannikar joined Osotspa in 2016 after an eight-year stint as president of Thailand’s century-old Siam Commercial Bank.
The bank’s net income quadrupled and total assets almost tripled under her watch as the lender became a major player in mutual funds, credit cards and investment banking.
Mr Petch and his family, including his cousin Niti Osathanugrah, had at least 2 billion shares in Osotspa, according to the IPO filing.
The company was established in 1891 as a small pharmacy in downtown Bangkok. Today, energy and sport drinks contribute 72% of the firm’s revenue.
Net income in the first half of 2018 dropped 18% from a year earlier to 1.47 billion baht, a regulatory filing shows. Total revenue slipped 5% to 12.5 billion baht.
Restructuring ahead of Osotspa’s listing led to a short-term drop in revenue and earnings, but the tighter focus on core businesses will produce results long-term, said president Wannipa Bhakdibutr.