Ferrum sets its sights on Star Gas LPG

SET-listed Ferrum Plc (FER), a mobile retailer, has been given the green light to acquire the liquefied petroleum gas (LPG) distribution branch of Star Gas Ltd.

Chief executive officer Prasit Srisuwan said the company’s board of directors has approved a plan to acquire all 600,000 shares of Star Gas from its shareholders for a total purchase price of up to 550 million baht in cash.

“We expect the plan to expand into the energy sector, which creates sustainable revenue and profit, will help reduce risks for our company,” Mr Prasit said.

Star Gas operates LPG retail, with 30 branches of LPG gas stations and another two compressed natural gas (CNG) stations under its own brand. It also provides space in the gas station to be leased by food retailers and car washes.

Ferrum’s board also approved the increase of the company’s registered capital from 2 billion baht to 3.45 billion baht through issuing 1.44 billion new shares.

The moves were the latest towards Ferrum’s plan to raise capital, expand and diversify into other businesses.

Ferrum changed its name last year from SET-listed M-Link Asia Corporation to better reflect the business diversification under its new ownership structure.

It is widely seen as distancing itself from the founder Yaowapa Wongsawat, sister of ousted prime minister Thaksin Shinawatra and the wife of Somchai Wongsawat, who was briefly prime minister in 2008.

The company finished a sweeping overhaul of its organisational and business structures, revamping its management team with a new chief executive.

The restructuring has reduced the Wongsawat family’s holding from 28.6% of M-Link to less than 5%, and ending with a complete exit last year.

Ferrum Plc posted a net loss of 47.2 million baht in the third quarter of this year, slightly better than a net loss of 47.7 million baht in the same period of last year.

For the first nine months of this year, the company had a net loss of 128 million baht compared with a smaller loss of 117 million baht in the previous year.

FER shares closed yesterday on the Stock Exchange of Thailand at 93 satang, down two satang, in trade worth 63.9 million baht.