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.
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)