SCG yesterday confirmed its interest in making a move into the retail sector as it invested over THB10 billion in Siam Global House Public Company Limited (SGH), potentially taking an approximate 30% stake of Global House’s total voting rights. The transaction shows a positive reaction to the growing demand for building materials and decorative products in the region – SGH sells building materials in warehouse store format – and is sure to see the company striving toward becoming a leader in the warehouse store market in the ASEAN region. The transaction will also allow for synergy of the expertise of both companies, further strengthening this position. The investment transaction is subject to approval of the Global House’s shareholders’ meeting on 1 October 2012.
President & CEO of SCG, Kan Trakulhoon, said that SCG Distribution Co. Ltd. has submitted an offer to invest in Siam Global House with 30.01 – 33.40% stake of Global House’s total voting rights through a private placement of 224 million shares and partial tender offer. The offer includes issued and paid-up ordinary shares, not exceeding 457 420 683 shares and no less than 391 094 684 shares, at THB14 per share as well as warrants, not exceeding 55 616 085 warrants and no less than 47 551 750 warrants, at THB9.30 per share. Upon the completion of the above investment, SCG Distribution will hold no less than 30.01% and not exceeding 33.40% stake of the total new ordinary shares and conversion of warrants. SCG Distribution has entered into Share Subscription Agreement (“SSA”) with Global House on August 26th, 2012, and this transaction is valued at approximately THB10 billion, including the conversion of warrants.
President of SCG Distribution, Kajohndet Sangsuban stated that this investment represents SCG’s entry into the retail business for building materials products. The sector is expected to see high rates of growth due to the changing consumer behaviour patterns. SGH is a leader in Thailand’s retail business, with its ‘warehouse store’ format. It offers a wide range of products, including building materials and decorative products, appliances and equipment for construction and maintenance, as well as housing/building/landscape decorations. SCG Distribution aims to become a sustainable strategic partner to SGH, while continuing to enhance its capabilities and opportunities to expand across the ASEAN region, including Thailand.
This transaction follows strong growth for SGH this year. Its first quarter net profit surged 28.63% to THB138.28 million on a 27.07% year-on-year gain in sales to THB2.50 billion. Last year it earned THB490.60 million on sales of THB8.39 billion. On Monday, the company’s stock rose 0.74% yesterday to close at THB13.60 – a sure sign that SCG’s investment is a wise one.
Adapted from various sources by Jack Davidson.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/29082012/sgc_cement_invest_global_house/