Banks ready to advise firms under SET's new holding-com
The Stock Exchange of Thailand's relaxing of rules for holding companies with their core business abroad is expected to attract more listings, and local banks are keen on playing an advisory role to those firms.
Kannikar Chalitaporn, president of Siam Commercial Bank (SCB), said yesterday that the new requirement for a holding company to own at least 50 per cent of all shares with voting rights in its subsidiaries, amended from 75 per cent, would encourage holding companies in the infrastructure sector to list on the Thai bourse.
The new regulation will go into effect on September 1.
The 75-per-cent rule was used to ensure that a Thai holding company had absolute control over its units, but holding companies have been unable to secure such a large stake, especially in a joint venture with a foreign partner.
SET president Charamporn Jotikasthira said expansion of local businesses into Indochina had been steadily growing.
"The SET, as a fund-raising source for Thai firms, has committed to support them so that they can expand into new areas and boost growth for their existing activities," she said.
CK Power, a unit of Ch Karnchang, which is registered in Laos to oversee the Nam Ngum 2 hydroelectric project, is preparing to list on the SET under the new rule.
SCB, KTB Advisory and Advisory Plus are its financial advisers.
Kannikar said infrastructure firms demanded huge funds to invest both locally and overseas. Market liquidity will also be strengthened from the new fund mobilisation by holding companies.
Fund-raising through the equity market does not affect banks’ deposit mobilisation.
The public should have various choices for investment and banks should support companies to trade in the market, she added.
Kittiya Todhanakasem, chairwoman of KTB Advisory, said the company had more than 10 deals in its pipeline, mainly for initial public offerings, capital increases, project finance and mergers and acquisitions. The company believes the amendment will draw more holding companies into listing on the SET and that would increase the need for financial advisory services.
Plew Trivisvavet, chief executive officer of Ch Karnchang and chairman of CK Power, said the company planned to apply for CK Power’s listing on the SET next year.
Ch Karnchang’s outlook for this year is definitely better than its earlier estimate of Bt18 billion thanks to its backlog of projects that will be delivered to customers this year, he said.
The company’s contracts will generate Bt120 billion in revenue until 2016.
It plans to join the bidding to construct infrastructure projects worth more than Bt350 billion.
"We aim to win at lest Bt20 billion in the second half of this year," he said.
Ch Karnchang reported a rise in first-half revenue of 15 per cent to Bt9.18 billion, but a 55-per-cent drop in net profit to only Bt232.56 million.
