Thoresen Thai Agencies (TTA), the country’s largest dry-bulk carrier, plans to enlarge its fleet from 25 ships to 40 in three years with additional financial flexibility from a planned issue of US$140 million in convertible bonds.
Half of the planned new bonds would support the purchases of new and second-hand vessels as well as potential investments, said Thitima Rungkwansiriroj, executive vice-president for finance and accounting.
The new funding would be in addition to an available credit facility worth about 20 billion baht and existing cash in hand of 8 billion baht, she said.
Four new ships are scheduled to be delivered to TTA by 2012 while the company plans to shop for second-hand ships so it can have 40 in its fleet by 2013, Ms Thitima said.
Another half of the new bonds will be offered to holders of existing convertible bonds issued in 2007, of which $68.6 million are currently outstanding, she said, adding that TTA’s exiting debt-to-equity ratio was low at 0.7 to 1 time.
President and chief executive M.L. Chandchutha Chandratat said the new issue and potential bond exchanges were part of TTA’s capital management strategy. “By tapping the international bond market, the transaction will allow TTA to lengthen our debt maturity profile while maintaining a sufficient level of capital to take advantage of future business opportunities,” he said.
Following the approval from the company’s board last week, the planned bond issue will be proposed for shareholder approval on Jan 28 with an eye to a March launch.
The convertible bonds are expected to have a term of five years with an option to be redeemed prior to maturity, and can be settled in cash or in the form of new shares upon conversion.
TTA reserved shares equal to 21% of outstanding shares on the issue of the 2007 convertible bonds. The cash settlement option is a significant plus for the company, said M.L. Chandchutha.
“This will allow TTA to avoid or minimise [share] dilution by settling the conversions in cash. Furthermore, if the convertible bonds are redeemed, TTA will also have an option to settle the redemption in cash or shares,” said M.L. Chandchutha.
The term of five years will extend the current convertible bonds’ maturities from 2011 and 2012 to 2016.
“This will provide TTA with a great degree of flexibility in optimising its capital structure and reducing dilution,” he added.
Apart from this potential transaction, TTA has existing approval to issue up to 6 billion baht worth of bonds.
“We will choose the option that is most attractive for the company and gives us a platform to create value for existing shareholders,” he said.
TTA shares closed on Friday on the Stock Exchange of Thailand at 21.20 baht, down 30 satang, in trade worth 132 million baht.
Half of the planned new bonds would support the purchases of new and second-hand vessels as well as potential investments, said Thitima Rungkwansiriroj, executive vice-president for finance and accounting.
The new funding would be in addition to an available credit facility worth about 20 billion baht and existing cash in hand of 8 billion baht, she said.
Four new ships are scheduled to be delivered to TTA by 2012 while the company plans to shop for second-hand ships so it can have 40 in its fleet by 2013, Ms Thitima said.
Another half of the new bonds will be offered to holders of existing convertible bonds issued in 2007, of which $68.6 million are currently outstanding, she said, adding that TTA’s exiting debt-to-equity ratio was low at 0.7 to 1 time.
President and chief executive M.L. Chandchutha Chandratat said the new issue and potential bond exchanges were part of TTA’s capital management strategy. “By tapping the international bond market, the transaction will allow TTA to lengthen our debt maturity profile while maintaining a sufficient level of capital to take advantage of future business opportunities,” he said.
Following the approval from the company’s board last week, the planned bond issue will be proposed for shareholder approval on Jan 28 with an eye to a March launch.
The convertible bonds are expected to have a term of five years with an option to be redeemed prior to maturity, and can be settled in cash or in the form of new shares upon conversion.
TTA reserved shares equal to 21% of outstanding shares on the issue of the 2007 convertible bonds. The cash settlement option is a significant plus for the company, said M.L. Chandchutha.
“This will allow TTA to avoid or minimise [share] dilution by settling the conversions in cash. Furthermore, if the convertible bonds are redeemed, TTA will also have an option to settle the redemption in cash or shares,” said M.L. Chandchutha.
The term of five years will extend the current convertible bonds’ maturities from 2011 and 2012 to 2016.
“This will provide TTA with a great degree of flexibility in optimising its capital structure and reducing dilution,” he added.
Apart from this potential transaction, TTA has existing approval to issue up to 6 billion baht worth of bonds.
“We will choose the option that is most attractive for the company and gives us a platform to create value for existing shareholders,” he said.
TTA shares closed on Friday on the Stock Exchange of Thailand at 21.20 baht, down 30 satang, in trade worth 132 million baht.