Thailand: Siam Commercial Bank sells Siam Cement stake to cover Sahaviriya loan

Visual from the SSI website. September 2015

Siam Commercial Bank Pcl said on Thursday it sold its stake in Siam Cement Pcl, raising 4.46 billion baht ($122.76 million) to help to cover provisions for loans to struggling steel firm Sahaviriya Steel Industries (SSI).

The bank was one of three main creditors that lent SSI money to buy Britain’s second-largest steelmaker in early 2011. But a sharp drop in international steel prices forced SSI to halt production last week at its British plant in Redcar in northeast England.

The other two banks are Krung Thai Bank and Tisco Bank. The three banks said on Monday they were working on restructuring around 50 billion baht ($1.4 billion) of SSI’s debt.

Siam Commercial Bank’s chief executive Arthid Nanthawithaya said the debt restructuring was expected to be completed in one or two weeks.

He also said Siam Commercial Bank was selling some of its foreign investments to meet a target of raising 7-8 billion baht ($192.78 million-$220.32 million) toward SSI loan provisions of 10-11 billion baht. The Siam Cement stake sale is included in the 7-8 billion baht target. The shortfall will come from SCB’s earnings.

The Siam Cement shares were sold to the Crown Property Bureau which is already a major shareholder in Thailand’s biggest cement firm, Arthid told Reuters. The Bureau also owns a 21.3 percent stake in Siam Commercial Bank.

“We sold all our holding in Siam Cement to the Crown Property Bureau,” Arthid said. “The Crown Property Bureau wanted to raise its stakes in Siam Cement. So, the shares changed hands in the same investor group.”

The Bureau manages the institutional assets of the Thai monarchy. Before Thursday’s purchase, the Bureau had 360 million equivalent to 30 percent in Siam Cement, stock exchange data showed.

Shares in Siam Commercial Bank, Thailand’s third-largest lender by assets, jumped 4 percent after the sale. Siam Cement shares rose 0.9 percent.
The broader SET index was down 0.2 percent against a backdrop of weaker Asian markets.About 9.07 million of Siam Cement shares changed hands in big lot deals on the main board, the Thai bourse said.

($1 = 36.3300 baht) (By Manunphattr Dhanananphorn. Writing by Viparat Jantraprap and Orathai Sriring; Editing by Simon Webb and Jane Merriman)

Also Read: Exclusive: Former executives of Thailand’s Krungsri, SCB to start new asset management firm Tallis

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.