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Group Lease in Major Expansion Drive **Revised Version.
01 Oct 2013
In a major capital raising exercise to support expansion and acquisition over the next two years, SET-listed motorcycle leasing firm Group Lease Public Company Limited (GL) has decided to offer over 341.5 million units of free warrants to shareholders at the ratio of 3 shares to 1 warrant. At the exercise price of 10 baht for 1:1 conversion into shares, the company can potentially raise up to 3.4 billion baht in new proceeds to strengthen its funding base by 2015.
According to GL chairman and chief executive Mitsuji Konoshita, the expanded funding base will enable the company to mount an aggressive expansion drive over the next two years in the leasing, hire-purchase and other types of new “small credit” businesses in Thailand and neighboring countries, especially Cambodia. He projected that the company’s current total portfolio of roughly 5 billion baht will double to 10 billion baht by 2015.
“Across Southeast Asia, there are a lot of small finance companies that reach their lending limits and could not expand further,” Mr. Konoshita stated. “But we are in a strong position to raise funds to support them. So we are expanding our range of businesses to become a financial service provider as well,” he added. Aside from this, the company is also known to have been in negotiations for the possible takeover of a sizable micro-finance business in Cambodia.
The latest decision to offer the warrants to shareholders was in accordance with a Board of Directors resolution yesterday (Sept 30, 2013). The resolution, which approved the issuance of over 341.5 million new shares (at .50 baht par value) to reserve for the exercise of the new warrants, will now be tabled before an Extraordinary Shareholders Meeting for approval on November 8. The record date to determine the rights for the warrants is set for November 20 while the registration book will close the following day.
The Board meeting yesterday also approved the issuance of up to 2 billion baht worth of debentures, the proceeds from which will be used as working capital and also to finance business expansion.
GL has reported a 181.5 million baht net profit for the first half this year, up 25.6% from the same period last year. Despite the general slowdown of the Thai economy, sales in Thailand have continued to grow strongly. The current monthly motorcycle leasing of more than 9,000 units represents a 30% increase from the same period last year. Mr. Konoshita said the company is on course to reach the monthly sales target of 12,000 units by year end.
Meanwhile, GL’s operations in Cambodia are being boosted by the recently-signed cooperation agreement with Siam Kubota Corporation (SKC) whereby GL Finance (GLF), GL’s wholly owned subsidiary in Cambodia, will take over the financing for the popular brand of Kubota farm machineries.
As a result of GLF’s cautious approach on motorcycle leasing, its original target to achieve monthly sales of 2,000 units in the third quarter is now put off to the fourth quarter although the target to achieve average monthly sales of 4,000 units next year is still on track since its nation-wide network of Points of Sales (POSs) at Honda dealerships across Cambodia has now been set up and in full operation.
KBANK Extends Financial Support to GL
17 Sep 2013
SET-listed motorcycle leasing firm Group Lease Public Company Limited (GL) led by Chairman and Chief Executive Mitsuji Konoshita today (Sept 17, 2013) signed an agreement with KBANK represented by Executive Vice President Vasin Vanich Voranan whereby the bank would extend financial facilities worth 1 billion baht to GL and also underwrite debentures for GL in accordance with a GL Board resolution yesterday to issue up to 2 billion baht worth of debentures to support the company’s aggressive growth.
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05 September 2013 : GL-KUBOTA Pact
GL-KUBOTA Pact
05 Sep 2013
SET-listed motorcycle leasing company Group Lease Public Company Limited (GL) will significantly expand its business in Cambodia to cover the leasing of agricultural machineries under a cooperation agreement with SIAM KUBOTA Corporation Company Limited, the market leader in farm machineries.
The agreement, cemented in the form of a Memorandum of Understanding (MOU), was signed today (Sept 5, 2013) by senior executives of the two companies led by GL chairman and chief executive Mr. Mitsuji Konoshita and SIAM KUBOTA president Mr. Hiroshi Kawakami. It effectively authorizes GL Finance (GLF), a wholly-owned subsidiary of GL that operates in Cambodia, to take over financing for the popular brand of Kubota farm machineries the bulk of which has been handled by Kubota dealers until now.
According to the MOU, the two parties have agreed that “the cooperative effort is in the best interest of the people (of Cambodia) as one of the objectives of this collaboration is to help in the improvement of their quality of life and standard of living.”
For GL, the latest pact with SIAM KUBOTA carries significant business growth potentials in Cambodia where it has started to run full steam on motorcycle leasing after a year of preparations and systems testing. “There is great opportunity to grow our business since there are good synergies between our own network of motorcycle dealerships and the well-established nationwide network of SIAM KUBOTA dealers,” GL’s Mr. Konoshita stated.
SIAM KUBOTA Corporation Co., Ltd, a joint venture between KUBOTA Corporation (Japan) and Thailand’s blue-chip SCG, has reported massive business growth in Cambodia with combined revenue rising more than 20-folds from a small base of 162 million baht in 2004 when it started operation to a projected 4 billion baht this year. Sales are forecast to jump further to 5 billion baht in 2015.
Mr. Konoshita stated that GL will utilize its expertise and experience in financial services to help SIAM KUBOTA further increase sales. “Cambodia is an agricultural-based economy and farm machineries are crucial to support its economic growth. Therefore, there are still plenty of growth potentials in the future,” he stated.
Mr.Hiroshi Kawakami, President of SIAM KUBOTA Corporation Co., Ltd. mentions that as the leader in Agricultural machinery provider in ASEAN, Siam Kubota has its oversea sales operations covering in Cambodia, Laos, Myanmar and other countries. In Cambodia, we have received good response and found that farmers are willing to use agricultural machinery to increase their production efficiency. Due to financial limitation, as a strong barrier, Siam Kubota put intention to create more alternatives and financial opportunities for farmers to easier own agricultural machinery. The company has signed MOU with Group Lease Public Company Limited (GL), the leading leasing firm who has been long commercialized in Cambodia and is authorized by National Bank of Cambodia as the first company to do leasing and hire purchase services in the country. Under the cooperation, GL would provide financial services through Siam Kubota dealers helping farmers increase opportunity to possess agricultural machineries.
In 2014, SIAM KUBOTA will establish a new company named “KUBOTA Cambodia Co., Ltd” in Phnom Penh to align to its business strategy and cope with the rapid growth of agricultural machinery application in Cambodia. The company plans to develop distribution network, marketing activities and after-sales service system with the target sales at 5,000 million baht by 2015.
Photo from the Signing Ceremony with Siam Kubota
05 Sep 2013
Venue: The Stock Exchange of Thailand Building
Due to the unexpected severe traffic, Mr. Konoshita, Chairman and CEO had to arrive by Motorbike Taxi
Mr. Varin Sachdev was the host.
From left to right, Mr. Opart Dhanvarjor, Senior Executive Vice President and Mr.Hiroshi Kawakami, President, Siam Kubota CorporationCo., Ltd. and Mr. Mitsuji Konoshita, Chairman and Chief Executive Officer and Mr.Somchai Limpattanasin, Director and Chief Operation Officer, Group Lease PCL.
After the ceremony, Mr. Konoshita gave speech on GL’s next Step to Agriculture Machinery in Cambodia.