Bangkok--29 Aug--IR network
With confidence in promising business potential of Khonburi Sugar Public Company Limited (KBS), Mitsui Group has exercised all the warrants of 50 million units at 12.70 baht although the warrants are Out-of-the-Money. Mr.Tat Wanakornkul, KBS’s Managing Director, explains that the total proceed of THB 635 million will be immediately deployed to drive KBS’s “Sugar Energy Complex” Master Plan, which will result in production efficiency enhancement, cost reduction, and competitive position strengthening of KBS’s Group.
Mr. Tat Wanakornkul, KBS’s Managing Director, announced that Mitsui Group from Japan, namely Mitsui & Co.,Ltd. and Mitsui Sugar Co., Ltd, have already exercised all the warrants of 50 million units (conversion ratio: 1 warrant per 1 newly issued share) at the exercise price of 12.70 Baht on August 28,2014. As a consequence, KBS will have an injection of THB635 million added to its capital to finance the strategic expansion projects.“The fact that Mitsui Group has exercised all the warrants at 12.70 Baht reflected Mitsui Group’s strong confidence in KBS’s business prospect. KBS will use the THB 635 million proceed to finance major investment projects that will help KBS Group fulfill the “Sugar Energy Complex” Master Plan”
Mr. Tat added that the “Sugar Energy Complex” is scheduled to be completed by the year 2015/16 or, within the year 2016/17, in the worst case scenario. The ongoing investment projects with capital budgeting of THB 4,291.7 million include the 12,000 tpd sugar capacity expansion (approximately 50% addition to existing capacity) and the 200,000 lpd ethanol plant. These strategic projects will be chiefly financed by long-term loans from financial institutions of approximately THB 3,000 million. The balance will be financed by KBS Group’s internal operating cashflows coupled with the proceed from Mitsui Group.
Mitsui group has become KBS’s shareholders since February 2013 as it entered into the Strategic Alliance Agreement with KBS. The objective of the joint venture is to jointly develop more business in sugar and related business to fortify KBS Group’s competitive position. The value creation has been designed to cover several areas such as raw sugar – refined sugar trading to capitalize on KBS’s refined sugar leadership position, technical support for production process and operation, and joint development and marketing of high grade sugar in international market.
So far, the collaboration between KBS and Mitsui Group is going very well as improvements in production and business processes have been gradually witnessed with harmonious chemistry on both sides. After exercising the warrants, Mitsui Group will increase their stake in KBS from 9.1% to 16.7%, which will promote even stronger relationship between them. “From this time on, KBS and Mitsui Group shall work closely to make KBS be recognized as a leading organization in cane, sugar, and bio-energy businesses, as stated in KBS’s Vision” Mr. Tat concluded.