27 Jun 2016
SET-listed digital finance firm Group Lease Public Company Limited (GL) expects new opportunities for mergers & acquisitions (M&A) in the regional markets and elsewhere as potential targets for takeover become “cheaper” because of sharp volatilities in the financial markets triggered by Brexit.
“There are always opportunities in any crisis,” asserted GL Chairman and Chief Executive Officer Mitsuji Konoshita. “Financially we are very strong. Our debt-to-equity ratio is only 0.5 and we are raising a lot of new funds. This is great for a crisis situation (like this),” he added.
Mr. Konoshita stated that there had been many offers in the past for GL to take over financial-services companies in the region but negotiations were inclusive because “they were too expensive”. But given the sharp volatilities in the financial markets triggered by Brexit, he expected that the prices for potential takeover targets would be cheaper now.
The GL boss is eyeing the M&A opportunities in Indonesia, Vietnam and Sri Lanka which are large markets for GL’s successful model of digital financing and carry enormous growth potentials into the medium- and longer-term future.
From a simple motorcycle-leasing company based in Thailand, GL has in recent years successfully expanded to Cambodia and Laos as it develops an efficient digital finance platform and expands its consumer-finance portfolios to cover agricultural machineries, solar panels and electrical appliances. It is set to launch new expansion into Indonesia shortly.
The new opportunities for M&A presented by Brexit has come after GL’s shareholders last week gave their consent for the company to issue 170 million warrants (GL-W4) which will be allocated to shareholders at the ratio of 9:1 (9 shares for 1 free warrant) at the exercise price of 1 warrant for 1 share for 40 baht over a two-year period.
Last week’s Extraordinary Shareholders Meeting (EGM) also approved the issuance of up to US$130 million convertible debentures for GL’s strategic partner J Trust Asia (JTA). The new funds from the convertible debentures and conversion of warrants will be used to finance expansion in GL’s existing markets of Thailand, Cambodia and Laos as well as other new markets in the Southeast Asian region and elsewhere.
Meanwhile, Mr. Konoshita reaffirmed that JTA has not sold any GL shares and would remain GL’s strategic partner as both groups join forces to expand their mutually-beneficial business in Indonesia and other ASEAN markets.
The clarification was necessitated after misunderstanding among some investors that JTA might have sold some GL shares after converting their first batch of US$30 million worth of debentures at the end of last year when JTA was listed as holding 98.1 million shares or equivalent to 6.43%.
The misunderstanding was caused recently when SET’s website listed JTA’s holdings as only 4.82% or amounting to 73.575 million shares. The difference, in fact, has been held by the Custodian.