GE buys Suntech Metals
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General Engineering's board of directors has agreed to acquire Suntech Metals Co for Bt459 million (32.6 million shares, or 100 per cent of registered capital) from six shareholders.
GEN will appoint three of its executives to replace three Suntech Metals directors who will resign accordingly.
Despite Suntech Metals’ current loss status, GEN believes it offers good prospects for revenue growth and profit in the future. The shares’ sale, acquisition and transfer are expected to be concluded within 15 days after GEN board’s approval.
Suntech Metals Co engages in the management and processing of scrap metals, including steel.
GEN has hired KT Appraisal to appraise the assets of Suntech Metals, a legal adviser, Weearawong C&P, and an accounting consultant, Grant Thornton.
GEN will fund the equity purchase with proceeds from a capital increase and company’s cash from operations, while maintaining adequate liquidity to support business operations, it says.
Benefits that GEN expects to gain from Suntech Metals consist of future profits from consolidation of financial statements and stock dividends, as well as expansion of GEN’s scope of business and investment through Suntech and diversification of business risk.
Combined assets of GEN and Suntech as of December 31, 2012, stood at Bt274.56 million.
GEN’s assets after acquisition of Suntech Metals will rise by 8 per cent. This increase of revenue-generating assets will contribute to an increase of GEN’s overall revenue, the company believes.
