Siam City Cement, that is listed on the Thailand stock exchange, owns three plants with a total cement production capacity of 14.5 million tonnes per annum. In addition to cement, it also produces concrete and other building materials.
The deal structure will see JC&C acquire 57,270,000 ordinary shares in the capital of Siam City Cement representing approximately 24.9 per cent of the issued share capital. Post the deal, Siam City Cement will become an associated company of JC&C. The company further said the deal represents a discount of 2 per cent to the closing market price of a sale share of THB358 on 27th March 2015.
Alex Newbigging, group managing director of JC&C, said: “The investment will provide us with a meaningful exposure to the Thai economy in an established sector and in a company with a strong reputation.”
The deal will be funded by bank loans, and post this, Jardine C&C’s net borrowings are expected to rise to $854.4 million from $239 million currently, while its gearing will increase to 8 per cent from 2 per cent.
JC&C was jointly advised on the transaction by Bank of America Merrill Lynch and Phatra Securities PCL.
Jardine Cycle & Carriage is a member of the Jardine Matheson Group, and it has an interest of just over 50 per cent in Astra, a premier listed Indonesian conglomerate, as well as other motor interests in Southeast Asia. Together with its subsidiaries and associates, JC&C employs around 245,000 people across Indonesia, Malaysia, Singapore, Vietnam and Myanmar.