CPL board greenlights Pangolin MA deal to increase assets, sales, confident of explosive growths after makeover

Stocks and Financial Services Press Releases Wednesday January 11, 2017 10:21
Bangkok--11 Jan--i2C Communications

CPL's directors approved a proposal to acquire the business of Pangolin Safety Products, a leading manufacturer and supplier of premium-grade safety equipment, through an EBT by which the target company's entire business would be transferred to CPL in exchange for 15.49 million shares to be issued at THB 34.28 per share (THB 531 million in aggregate) and allotted on a private placement basis to raise CPL's registered capital from THB 264 million to THB 418.90 million. The Wongcharoensin group of shareholders declared their intention to make a tender offer for the shares, and convened a shareholders' meeting on 23 Feb to seek shareholders' approval. The proposed deal, the first major business revamp after CPL's SET listing 22 years ago, would grow the company's assets and sales significantly.

Mr. Suwatchai Wongcharoensin, Vice Managing Director of CPL Group Public Company Limited, or CPL, a Charoensin Group company that is a major tannery in South-East Asia, revealed that at the 10 Jan board meeting CPL's directors endorsed a proposed deal involving acquisition of the business of Pangolin Safety Products Co. Ltd., or Pangolin, and issuance and allotment of capital-increase shares to Pangolin on a private placement basis in exchange for Pangolin's business. In this connection, he said, the directors also resolved to raise CPL's registered capital from THB 264 million (par value at THB 10 per share) to THB 418.9 million by issuing 15,489,942 new shares at about THB 34.28 per share, or THB 531 million in aggregate. These transactions would raise the equity stake of the Wongcharoensin group of shareholders in CPL from 51.27% to 69.29%, and the Wongcharoensins announced their intention to make a tender offer for such new shares. The company has called an extraordinary shareholders' meeting to be held on 23 Feb to seek shareholders' approval of the transactions.

"The proposed merger between CPL and Pangolin would be an Entire Business Transfer (EBT) from Pangolin to CPL. After completion, CPL would be the sole surviving company, and, of course, CPL's asset size would increase. It would be CPL's first major overhaul in almost 22 years after the listing on the Stock Exchange of Thailand (SET) in 1994, as the company would transform itself from one of South-East Asia's major manufacturers and suppliers of leather tanning products to global shoe brands into an integrated provider of upstream to downstream business products, including Pangolin's core products – safety and personal protective equipment – which are downstream business products," added he.

With a registered capital of THB 100 million, Pangolin manufactures and supplies a comprehensive range of safety and personal protective equipment that meet international standards, including, for example, Pangolin foot and head protection equipment, eye and face, respiratory, fall, hearing and body protection equipment. It posted nine-month results of 2016 with a sales revenue of THB 445.2 million and a net profit of THB 36.6 million. Its products satisfy international standards, and its safety shoe products command the largest market share in the segment. Its major customers are industrial plants and state enterprises in Thailand. It also has authorized dealers and distributors in Indochina and exports products to several markets globally.

The vice managing director expressed confidence that the proposed acquisition of Pangolin, a leading player in the business of manufacture and supply of safety-related equipment, which grows in line with the national industrial and economic growths, would lead to CPL's rapid growths and strengthen the company's business.

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