28 Dec 2015
Japanese financial group J Trust is committed to long-term investment in Thailand-based Group Lease Public Company Limited (GL) as a strategic partner that together will grow leasing and other consumer-finance businesses in Indonesia and other markets in ASEAN.
“We consider our alliance with GL to be beneficial to both parties because we will grow our banking business as we support GL to grow its leasing and other finance-related businesses in the ASEAN markets as well,” J Trust said in an official statement issued in Tokyo today (Dec 28,2015).
The statement came after J Trust, through its wholly-owned subsidiary in Singapore JTrust Asia PTE. LTD., decided to exercise its right to convert US$30 million worth of GL’s convertible debentures into 98.1 million GL shares, which will amount to about 6.43% of GL’s expanded capital base. JTrust Asia subscribed to the debentures in May this year.
“Through the conversion of stock, we are supporting the growth of leasing and other consumer-finance business in Indonesia and other ASEAN markets together with GL as our strategic partner.
And we can also expand our banking business,” the J Trust statement said.
GL Chairman and Chief Executive Officer Mitsuji Konoshita said although J Trust’s conversion may lead to a shareholding dilution, earnings per share will not be diluted and the net result will be very positive for GL. “Through our collaboration with J Trust, our new business in Indonesia will generate more profits and our earnings per share (on the new capital base) will further increase,” he said.
GL is in the process of registering a new joint venture company in Indonesia with J Trust and another local Indonesian entity as joint-venture partners to kick-start leasing and other consumer-finance businesses in Indonesia. Funding for the new venture will come from a local Indonesian bank, PT Bank J Trust Indonesia, which is a J Trust subsidiary. The new Indonesian business is expected to kick off early next year.
GL’s latest expansion into Indonesia is coming after the company’s successful expansion into Cambodia and Laos. Profitability from the Cambodian operations in particular has been remarkable and has now surpassed that from operations in Thailand. Of the 150.27 million baht record-high profits in Q3 this year, roughly 70 million baht was from Thai operations while the remaining 80 million baht were contributed from overseas the bulk of which from Cambodia.
Mr. Konoshita has stated that the company is expanding aggressively into the booming markets of CLMV (Cambodia, Laos, Myanmar and Vietnam) plus Indonesia because of their strong growth potentials whereas in Thailand, GL has been focusing more on consolidation and asset-quality improvement due to the economic slowdown.
He is particularly bullish on Indonesia which has a far larger population (250 million) with growing numbers of new consumers with higher purchasing power. “The Indonesian market is ten times larger than Cambodia,” he stated.