Thai cement maker TPI Polene is likely to succeed in its twice-aborted sale of a US$284.8m stake to the public this week, a deal that will accelerate its debt restructuring, analysts said. They said on Wednesday demand for the 37.15 per cent stake was strong due to an improved earnings outlook for Thailand's third-biggest cement firm, boosted by strong sales on the back of robust domestic economic growth.
This is the firm's third attempt to sell shares to the public within a year. Efforts in March and November last year were scrapped due to poor market responses, but analysts said sentiment was better now.
TPI Polene, 49 percent owned by Thailand's biggest corporate defaulter, Thai Petrochemical Industry, plans to sell 300 million new shares at 37 baht each, a 26 percent discount to the market price, on January 15, 16 and 19. Over the last year, TPI Polene shares have surged 233 percent, outperforming bigger rivals Siam Cement, up 101 percent, and Siam City Cement, which has risen 20 percent. TPI Polene has annual production capacity of 9Mt and an 18 per cent market share, making it number three maker after Siam Cement and Siam City Cement.
TPI Polene says it will use the expected 11.1 billion baht (US$284.8m) proceeds of the share sale to buy back debt at a discount, which will help cut its debt burden by half to about US$500m, and then issue bonds to refinance the rest.