Capital increase aimed at Krisda Mahanakorn turnaround
Krisda Mahanakorn, once a big player in the property market, is trying to regain its former glory by increasing capital to Bt142 billion to build a fast recovery in its loss-making business.
KMC’s board of directors has approved a doubling in par value from Bt10 to Bt20 and the offering of 4.49 billion new shares to existing shareholders for Bt0.50, against the Bt20 par value. Then par value would be slashed from Bt20 to Bt0.70 to write down share loss and retained losses.
As of September, the losses were Bt28.7 billion.
A total of 5 billion shares with par value of Bt0.70 are to be offered in a private placement for not lower than 90 per cent of the market price.
Shareholders will meet on February 11 to approve the |resolution, which involves the issuance of 12.1 billion new shares.
Asia Plus Securities expects a 78.3-per-cent dilution |effect, but the company would have more capital to fund expansion.
"The company plans to raise revenue in the short term by buying and reselling complete condominium buildings. It also plans two new condominium projects and one detached-house project to boost 2013 presales to Bt3 billion," the securities house said.
"Success will depend on the management’s ability, competition in the property market and the success of the KMC rebranding."
In the first nine months of this year, KMC showed a net loss of Bt51 million on Bt365 million in sales. KMC in 2010 and 2011 managed to report net profits of Bt30 million and Bt86 million, against a Bt511-million net loss in 2009.
