ACAP seeks partner to spur consumer finance business
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ACAP Advisory, the parent company of Capital OK Co, is negotiating with a non-bank from Japan for a strategic partnership to strengthen funding cost so that Capital OK can compete in the consumer-finance business in Thailand.
ACAP acquired Capital OK from Shin Corp in 2007 after Shin had to divest some subsidiaries when Temasek Holdings became the major shareholder.
Sugunya Sukjaroenkraisri, chief executive officer of ACAP, said yesterday that negotiations were expected to be completed by next quarter. She added that a Japanese non-bank was interested in Capital OK, as it wanted to expand into the consumer-finance business in Thailand.
“Capital OK will be able to compete with banks and non-banks if its cost of funds is lower. We are offering many options to strategic partners if they desire major stakes in Capital OK,” she said.
She added that while waiting to sign up a strategic partner for Capital OK, ACAP this year would |give importance to providing working-capital loans to small and medium-sized enterprises via another subsidiary, OKCASH Co.
She said that OKCASH had room to grow in lending to SMEs as banks are more cautious, and focused on sustaining their reserves in order to maintain their capital ratios, in keeping with the international regulatory framework for banks (Basel III).
“SMEs have demanded increases in working capital to improve their liquidity, while we will be completing our internal restructuring begun in the middle of last year, making us ready to provide working capital to SMEs aggressively,” she said.
OKCASH is targeting new loans of more than Bt2 billion this year, up from Bt350 million last year.
ACAP will issue debentures worth Bt2 billion and bills of exchange (B/Es) worth Bt1 billion as raise funds to support the lending target, she said.
The company has to lock in low funding costs via debentures and B/Es before interest rates in the country rise again in the second half of this year, Sugunya added.
She said a major source of revenue for ACAP was Global Service Centre, another subsidiary that offers call-centre and debt-collection services.
Many companies hired Global Service Centre as an outsourcing company to service their customers, which, as a result of the great number of call-centre staff, has an advantage for ACAP in managing debt|collection. The back office of |ACAP is strong enough to deal with bad debt and the company |will aggressively chase lending, she said.
