Japanese partners pour Bt1.54bn into SSI
JFE Steel Corp and Marubeni-Itochu have injected Bt1.54 billion into Sahaviriya Steel Industries, as part of a partnership agreement that is expected to strengthen SSI's finances and operations.
Some 2.27 billion shares were equally offered to the two Japanese companies in a private placement on Tuesday at a price above yesterday’s stock market close of Bt0.62, but well below the Bt1 par value.
“The offering of newly issued shares to JFE and Marubeni-Itochu will strengthen the business relationship between the company and the world’s leading steel producers, who possess the capabilities in production technology in integrated steel industry,” Win Viriyaprapaikit, president of the Thai company, said yesterday.
“Engaging in this business partnership not only brings about the stability and security of raw materials to the company, but will also lead to improvements in operational efficiency and developments in the quality of the company’s products and services.”
JFE Steel is one of the world’s largest integrated steel producers, while Marubeni-Itochu is a leading trading company specialised in iron and steel products in the export, import and domestic fields.
Under the partnership agreement signed on October 31, JFE and Marubeni-Itochu bought the shares to indirectly increase their stakes in the three firms’ existing joint-venture company, Thai Cold Rolled Steel Sheet, to 36.04 per cent and 25.01 per cent, respectively.
The firms will also provide technical assistance, assist and transfer to the joint venture the necessary technology for producing stable supplies of cold-rolled steel sheets to meet growing demand in the Thai automotive industry.
In addition, JFE agrees to support SSI Group in the effort to continuously improve operational performance through technical cooperation.
The three companies foresee growing demand in the Asean market, especially in high-grade steel-sheet products for the auto industry. They expect cooperation under the partnership agreement will result in better products and services for customers in the region.
In the Thai market in particular, the partnership will lead to more localisation of high-grade steel sheet and add value to customers and local industries.
SSI plans to offer a total of 5.3 billion shares in private placements. It is part of the offering of 19.4 billion new shares at par value to help fund the company’s acquisition of Teesside Cast Products in the United Kingdom.
SSI bought the Teesside Cast Products plant as part of a
