Group Lease all set for robust growth in Cambodia
25 Apr 2013
SET-listed motorcycle leasing firm Group Lease Public Company Limited (GL) has decided to raise the capital of its Singapore-based holding company in order to support what promises to be robust business growth in Cambodia, which is expected to make significant contributions to GL’s bottom line this year.
According to GL chairman and chief executive Mitsuji Konoshita, the trial operations in Cambodia over the last six months have proven to be highly satisfactory. There has been not one single case of non-performing loans (NPL) among the first group of 200 Cambodian clients, except for two stolen cases which were fully insured. “We are now ready to launch full operations there,” Mr. Konoshita declared.
The number of customers in Cambodia, which is managed by GL’s wholly-owned subsidiary GL Finance (GLF), will increase to 1,000 next month and this will double to 2,000 in the third quarter as originally planned. “We could have pushed the numbers sooner, but we wanted to make sure that our Cambodian operations proceed in a prudent and solid manner,” Mr. Konoshita stated.
To ensure that the financial resources for the Cambodian operations are adequate and to compile with National Bank of Cambodia regulations on capital sufficiency, GL has decided to raise the capital of its holding company in Singapore by roughly 100 million baht. The Singapore unit – Group Lease Holdings Pte. Ltd. – will serve as the main funding source for the Cambodian operations.
According to an official filing with the Stock Exchange of Thailand (SET) today (April 24, 2013), the registered capital of the Singapore holding company is being raised from S$ 3 million to S$ 4.6 million while the paid up capital will increase from S$ 757.500 to the full S$ 4.6 million. The money will be drawn from GL’s ample cash reserves which were recently boosted by the conversion of more than 9.2 million units of warrants into ordinary shares generating proceeds of 323.7 million baht.
Alongside the new expansion in Cambodia, GL’s main operations in Thailand are also growing strongly – thanks to a rapid expansion of the dealers’ network particularly around the industrial zones of Chon Buri and Rayong where demand for motorcycles leasing is high.
Since the start of the year, GL has been recording monthly sales of around 8,000 units although the numbers are dropping to about 7,000 this month due to the long Songkran holidays. However, Mr. Konoshita maintained that sales will jump to about 10,000 next month, a target the company had earlier expected to achieve around year-end.
GL last year recorded a hefty 66% jump in net profits to 357 million baht. Thanks to the continuous strong growth in Thailand plus what promises to be substantial revenue contributions from Cambodia, Mr. Konoshita has expressed confidence that GL will be able to maintain the same impressive profits growth rate this year.