TRIS Rating Places “Developing” CreditAlert on Company Rating of “UV”

TRIS Rating Co., Ltd. has placed the company rating of Univentures PLC (UV) on CreditAlert with a “developing” implication. The rating action follows the company’s announcement on 7 September 2012 that it plans to acquire 24 million shares, or 40%, of all the ordinary shares of Grand Unity Development Co., Ltd. (Grand U). UV plans to acquire the shares of Grand U which are currently held by L.P.N. Development PLC and by Yaowawong Holding Co., Ltd. UV has offered to pay Bt15 per share or a total of Bt360 million for the shares. In addition, UV plans to make a voluntary tender offer for all securities of Golden Land Property Development PLC (GOLD), including the common shares and warrants. UV has offered Bt5.5 per share for each common share of GOLD and Bt2.5 for each of GOLD’s outstanding warrants. This transaction will cost UV a maximum of Bt7,497 million. The company plans to fund these two transactions with a capital increase of Bt8,200 million.

For the Grand U transaction, UV plans to issue 264 million new ordinary shares and allot the new shares to its existing shareholders at a price not less than Bt2.5 per share. This new share issue will raise a total of Bt660 million in new equity capital. If there are still shares remaining from the initial allotment made to UV’s existing shareholders, UV will offer the remaining unsold shares to specific persons via a private placement. The price of the shares sold in the private placement will be determined by bookbuilding, that is, by surveying institutional investors to know their demand for shares at different offering prices. However, the price for shares sold in the private placement will not be lower than the price offered to UV’s existing shareholders. Of the Bt660 million in new equity capital, Bt360 million will be used to purchase 40% of Grand U, while the remaining Bt300 million will be used to expand Grand U’s business.

For the GOLD transaction, UV will make a voluntary tender offer (VTO) for all the securities of GOLD, which is subject to a condition that UV is able to purchase more than 50% of total issued shares of GOLD. UV has made a memorandum of understanding (MOU) with Rock Key International Limited (RKIL), a shareholder of GOLD. RKIL agrees to sell to UV 281,316,464 shares (or 24.8% of all issued and sold ordinary shares of GOLD) and 108,479,551 warrant units under a VTO, at an offer price set by UV. Under the terms of the MOU made with RKIL, UV is entitled to cancel its tender offer to purchase all securities of GOLD if, upon the completion of the tender offer, UV is unable to purchase more than 50% of the total issued shares of GOLD. UV plans to finance this transaction by using a bridge loan from a bank. The loan will be repaid after UV completes its planned capital increase. UV plans to increase its share capital by issuing 3,016 million new ordinary shares at a price not less than Bt2.5 per share. This action will raise Bt7,540 million in new equity capital. The new shares will be allotted first to UV’s existing shareholders. The remaining shares will be allotted to specific persons via a private placement at an offering price determined by bookbuilding.

The acquisitions and the capital increases are expected to be completed by late December 2012. However, these transactions are subject to shareholder approval at an extraordinary general meeting (EGM) of the UV shareholders on 17 October 2012. In the case of the GOLD securities acquisition, the VTO may be cancelled if either of two conditions apply: if UV is unable to purchase more than 50% of the total issued shares of GOLD or if the bridge loan cannot be arranged before the EGM date. It is still uncertain if the acquisitions will be completed as planned. Therefore, TRIS Rating will closely monitor the transactions and resolve the CreditAlert once the transactions have been finalized and a thorough analysis has been conducted. — End

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