SCCC rebalancing with rights offering

SET-listed Siam City Cement Plc (SCCC), Thailand’s second-biggest cement maker, is increasing its registered capital in order to strengthen its financial situation and fund its overseas acquisitions and rebalance its capital and debt structure.

The company has informed the Stock Exchange of Thailand (SET) that the company’s board of directors approved on Feb 10 a plan to reduce the company’s registered capital by 500 million baht from the existing 2.8 billion baht to 2.3 billion baht.

This results in a cancellation of 50 million authorised but unissued shares, at a par value of 10 baht per share.

Following this, the company plans to increase its registered capital from 2.3 billion baht to 2.98 billion baht by issuing 68 million ordinary shares with a par value of 10 baht per share, totalling 680 million baht, according to a statement released by SCCC.

The 68 million new ordinary shares are due to be offered for sale to the SCCC’s existing shareholders in proportion to their respective shareholdings in a rights offering at the rate of 3.382353 existing ordinary shares for one new ordinary share, at the offering price of 250 baht per share.

The fund raised from the capital increase was expected to be used up to repay outstanding debts, including interest and relevant expenses of around 4 billion baht.

Some 18 billion baht will be set aside for the acquisition of Holcim in Vietnam and another 13 billion will be used for the acquisition of Holcim in Sri Lanka, while the rest is expected to be used to rebalance the company capital structure and for general operating expenses.

SCCC posted a smaller profit for 2016 despite a 10% rise in revenue.

The company had total revenue of 34.2 billion baht, up from 31.1 billion in 2016.

Net profit was 3.9 billion baht in 2016, down from 4.6 billion a year earlier.

SCCC shares closed yesterday on the SET at 282 baht, up 6 baht, in trade worth 126 million baht.