Bangkok--27 Sep--Thitikorn
K Bank signed 500-million-baht long-term loan fixed rate with TK
- 3 years loan fixed rate to mitigate interest risk and maintain TK competitiveness
- TK issued 570-million-baht debenture in July was well received by the market
Thitikorn Public Company Limited (“TK”), a leading motorcycle hire purchase in Thailand, has sealed the long-term loan worth 500 million baht with Kasikorn Bank (“KBANK”) to fund the expansion and maintain its competitiveness.
“3 years longer term loan with fixed interest rate will serve TK expansion plan and to replace the matured debenture”, said TK Managing Director Prathama Phornprapha, the contract signing ceremony took place on September 25, 2013.
She said under the deal, the KBANK offered three years fixed rate loan. “In mid July, TK issued three-year debenture worth 570 million baht with fixed interest rate and was well received by the market because of TK strong rating of A- by Tris Rating. As of August this year, TK long-term fixed-rate loan portion was about 78% of total loan of 4,920 million baht and over 80% of total loan is fixed rate,” she said.
She said debenture and fixed long-term loan is a good financial instrument for TK to control our financial cost due to competition in the market is very fierce, especially lower interest rate charges and down payment offer by our competitors. TK has clear policy to avoid participate the price competition, but we will concentrate on providing a good service to motorcycle dealers and the customers. Long-term loan with appropriate fixed interest rate will help TK maintain our competitiveness.
“TK has to manage its source fund in order to maintain our leading position in the market and we will focus on providing a good service to the dealers whom refer business as well as our customers,” said Miss Prathama.
Meanwhile, Mr. Prapol Phornprapha, TK Deputy Managing Director, added that the fixed long-term loan not only maintain TK competitiveness, but also served our expansion plan to open 10 more provincial branches this year. So far, TK has opened 6 new provincial branches and by the end of this year, all 10 new provincial branches are expected to be opened enabling the firm to have 93 branches nationwide.
“Expansion in the provinces will keep TK growth momentum and to achieve our target to increase provincial business portion to 80% within next two years from the current of around 70%, since 80% of motorcycle sales is from the provinces,” said Mr. Prapol.
He said a portion of KBANK loan was replacing the matured debenture and long-term loan. TK will mitigate interest rate risk to maintain our competitiveness in the market. TK’s D/E ratio is about 1.6 times comparatively low against the financial industry which is about 8-9 times. Currently it has un-used credit facility of more than 2,000 million baht from the leading financial institution in Thailand.