Bangkok Post reported that Rich Asia Steel Plc plans to increase its capital by issuing 2 billion new shares to existing shareholders to expand its business in 2013.
As per report, it will raise THB 1 billion from the capital increase program and current shareholders, with each share giving the right to buy two new shares at 50 satang each.
Ms Angkakarn Tantiviroon CEO of Rich Asia Steel Plc said that the money raised will be distributed among its two subsidiaries Thai National Product, ASEAN's largest spun concrete pile maker and Siam Ferro Industry.
TNP will receive THB 150 million to raise its spun concrete pile capacity by 25% to 15,000 tonnes a month.
Siam Ferro will receive THB 400 million to triple its auto parts steel capacity to 15,000 tonnes a month from 5,000 tonnes
RAS itself will spend THB 200 million to lift steel production by 140% to 12,000 tonnes a month.
After completion of the capital increase, RAS's debt to equity ratio will be halved to 1.4 times. The steel industry is expected to see an upturn in demand after the recent global economic slowdown.
Ms Angkakarn said that "The steel business is facing intense competition, especially a price cutting war. We've been diversifying to other construction materials such as spun concrete piles through TNP and auto parts at Siam Ferro."
RAS owns 51.88% of Siam Ferro. In the first half of this year, RAS achieved total revenue of THB 1.8 billion for a net loss of 172 million.
Siam Ferro posted a net loss of THB 54 million on revenue of 300 million in the period. TNP achieved THB 150 million in revenue for a net profit of 5.6 million. The three companies expect significantly higher revenues and profits in the second half on rising demand.
Ms Angkakarn said RAS's full year revenue may reach THB 5 to THB 6 billion. At present, TNP has a backlog worth THB 500 million. It has been invited to bid on 51 new construction projects to supply concrete piles worth a combined THB 8 billion and expects to win 20% of these.
Source - Bangkok Post
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