Reuters | March 28, 2011 | Wirat Buranakanokthanasan
* To offer 6.73 bln shares at ratio of 0.865 for 1 existing share
* Price at 68 pct discount, dilution effect of 30 pct
* Shares slip as much as 9 pct to a four-month low
(Adds details, comments from company, analyst)
By Khettiya Jittapong and Manunphattr Dhanananphorn
BANGKOK, March 28 (Reuters) – Thai telecoms group True Corp Pcl said on Monday it plans to raise up to 13 billion baht ($430 million) via a rights issue at a steep discount, to finance its 3G expansion and repay debt.
The rights issue plan sent its stock down to a four-month low on concerns about a dilution effect of about 30 percent.
True, which owns True Move, Thailand‘s third-largest mobile operator, plans to offer third-generation mobile services in the Thai mass market late in the third quarter, Chief Executive Supachai Chearavanont told reporters.
“The proceeds are enough to finance our 3G network expansion and we think this is the best way for us,” Supachai said.
True plans to spend 12 billion baht to install 4,500 3G base stations in the next three years, of which 2,000 base stations would be installed this year, he added.
Valued at $1.6 billion on the Thai bourse, True plans to offer 6.73 billion new shares via a rights issue at a ratio of 0.865 new share for one existing share at 1.95 baht each, 68 percent lower than Friday’s closing price of 6.10 baht.
The stock has fallen 20 percent since Tuesday because of rumours about the capital-raising plan.
True shares closed down 6.6 percent at 5.70 baht, bouncing back from a four-month low of 5.45 baht hit earlier. The broader index ended 0.5 percent lower.
“The rights issue takes us by no surprise, but it comes earlier than expected because we thought this might happen in the second half of this year,” said an analyst at Kiatnakin Securities.