Bangkok: Thailand’s top industrial conglomerate, Siam Cement Pcl, said on Wednesday it would sell a 15.59% stake in the country’s top olefins maker PTT Chemical Pcl (PTTCH) for 33 billion baht ($1.10 billion).
The sale, which will allow Siam Cement to pursue the regional and domestic expansion of its core businesses, pushed PTTCH shares down more than 5% at the opening.
Siam Cement, 30% owned by the royal family’s Crown Property Bureau, planned to sell 236 million shares in PTTCH at 140 baht per share to local and international investors, the company said in a statement to the stock exchange. That is a 9% discount to Tuesday’s close of 154 baht.
At 09:20 am, PTTCH shares had fallen 4.6% to 147 baht, underperforming a 0.7% decline in the main index.
Siam Cement shares rose 2% because of the profit it will book from the divestment.
It said it expected to book a non-recurring profit after tax of about 8.8 billion baht in the fourth quarter. It will retain 67 million shares, or 4.42% of PTTCH, after the stake sale.
The transaction will be done through a global book-building via underwriter Phatra Securities Pcl and three initial purchasers -- Bank of America Merrill Lynch, UBS AG in Hong Kong, and Credit Suisse (Singapore) Ltd.
The transaction would not affect Siam Cement’s existing off-take agreement with PTTCH, which supplies raw materials to its downstream operations, it said.
The conglomerate bought shares in National Petrochemical Co in 1984 and in Thai Olefins Pcl in 1989 before the two companies merged to form PTTCH in late 2005.
Siam Cement, valued at about $13.9 billion, is Thailand’s third-largest listed company. It generally earns up to half its profit from petrochemicals, the rest coming from paper, cement and other building materials.
Shares in Thai Plastics and Chemicals Pcl jumped 9% at one stage on expectations that Siam Cement would use the proceeds from the divestment to invest in the petrochemicals business and that Thai Plastic would benefit.
Thai Plastic, 45.64% owned by Siam Cement, is Southeast Asia’s largest polyvinyl chloride (PVC) maker. At 09:20 am Thai Plastic was up 7.9%.