Ratchathani plans two 2013 debenture issues
Ratchathani Leasing will continue its strategy of issuing at least two lots of debentures per year under its business plan for next year to manage its cash flow effectively and diversify its funding costs, its managing director Kovit Rongwattanasophon has
Ratchathani plans to issue two lots of debentures next year, each worth Bt2 billion-Bt3 billion. The issues will be launched at the end of the first quarter and the end of the third quarter.
The value of the debentures to be issued next year is lower than this year’s Bt9 billion, which included a Bt5-billion issue to raise a large amount of cash to repay bank loans.
The company’s long-term debenture issues are aimed at raising cash to repay short-term loans borrowed from banks, to raise working capital, and to raise money for lending to its customers, who are commercial truck operators looking for funds to purchase vehicles.
Of the firm’s total funding, 60 per cent is from debentures and 40 per cent from bank loans. The company’s debentures always carry a four-year maturity, matching the four-year term of the loans it extends to customers for buying new vehicles.
The company projects new lending |next year will grow to Bt15 billion from Bt12 billion this year. Outstanding loans next year are expected to surge to Bt22 billion-Bt23 billion from Bt18 billion-Bt19 billion, Kovit said.
Ratchathani Leasing is a major player in the commercial truck loan business. This portfolio accounts for 70 per cent of total outstanding loans. The remaining portfolio is for used cars, big bikes, super cars and agricultural vehicles.
Demand for commercial truck loans is growing, especially in the border provinces and elsewhere upcountry thanks to the growth of urbanisation and the impending Asean Economic Community.
“We have set up a branch in Chiang Rai to serve the demand for truck loans, because the businesses there would see skyrocketing growth from transportation and logistics from Indochina. We plan to set up two branches in Ubon Ratchathani and Krabi or Hat Yai next year as well,” Kovit said.
