Thai Union has notified the Stock Exchange of Thailand (SET) that it plans to list its feedmill subsidiary, Thai Union Feedmill (TFM), on the bourse through an initial public offering (IPO), the seafood giant said on 22 February.
Thai Union will conduct the IPO of 90 million new ordinary shares, including 2.5 million shares for TFM’s directors, executives, and employees, with a par value of THB 2.00 (USD 0.07, EUR 0.05) each. The 90 million shares will account for 18 percent of the subsidiary’s paid-up capital after the IPO.
As part of the IPO, another 19.3 million shares of TFM currently held by Thai Union will also be sold to the public with the same par value of THB 2.00 each, as with the newly-issued shares.
The IPO, pending SET's approval, will result in a reduction in Thai Union’s equity interests in TFM and is seen as a disposal of an asset by a listed company, Thai Union said. It added that the decision to conduct the IPO comes from many factors, such as market conditions and investor demand.
Thai Union currently holds 66.9 percent of issued shares in TFM, but that total will decrease to 51 percent after the IPO. It plans to use the capital earned from the IPO to support business expansion. The offering price has not been announced yet.
As of 2020, TFM had total assets worth nearly THB 2.5 billion (USD 83.2 million, EUR 68.6 million), up 11.5 percent from 2019. However, its sales value last year fell 13.8 percent year-on-year to THB 4.18 billion (USD 139 million, EUR 114.6 million). TFM’s net profit also tumbled by 51.2 percent to THB 410 million (USD 13.6 million, EUR 11.2 million) in 2020, against 2019.
According to Thai Union, the reduction of shares in TFM reflects part of the reorganization of its business structure. The IPO will help Thai Union “relieve a long-term financial burden in relation to fund or long-term financial support given to TFM because TFM will be able to independently raise funds through this IPO, or at any time through the SET or other channels using various kinds of financial instruments after it becomes a SET-listed company,” the firm said.
Photo courtesy of Thai Union Feedmill via Facebook
