TTA proposes to pay Bt 0.75 as final cash dividend on top of stock dividend; strong cash build-up reported as company scouts for suitable acquisitions in view of long-term growth
Thoresen Thai Agencies Public Company Limited ("TTA") posted record-breaking revenue in 2008 and record-breaking net profit of Baht 8,776 million, up 76.88 per cent from last year. In a show of confidence, the company proposes an annual cash dividend payment of Baht 2.25 per share and a stock dividend payment at a ratio of 10 existing shares per one stock dividend. TTA believes our innovative approach rewards the shareholders, while seeking to properly position the company for the longer term.
M.L. Chandchutha Chandratat, Managing Director of TTA, said that, "Fiscal year 2008 (which ended on September 30, 2008) was another record-breaking year for TTA. We closed the financial year with impressive operating revenues of Baht 35,146.15 million, up 70.65 per cent from last year, which resulted in a strong cash position of Baht 11,527.80 million. The substantial cash on our balance sheet makes TTA well-positioned for the expected economic downturn going forward and will allow us to opportunistically acquire assets or companies at an attractive price".
The Board of Directors resolved to propose to TTA shareholders at the upcoming Annual General Meeting of Shareholders to consider and approve an annual dividend payment in cash of Baht 2.25 per share. Since TTA had paid an interim dividend to shareholders at Baht 1.50 per share on June 13, 2008, the remaining cash of Baht 0.75 per share will be paid to shareholders. Moreover, a stock dividend will be allocated to shareholders at the ratio of ten existing shares to one stock dividend with a par value of Baht 1 per share, equivalent to Baht 0.1 per share. The final cash and stock dividend payment will be made on February 24, 2009. The record date of the TTA share register book to receive dividend payments is scheduled to be February 6, 2009.
"TTA wants to maintain its policy of paying a dividend value equivalent to 25% of consolidated net profits after tax but excluding unrealised foreign exchange gains or losses. Even by paying a portion of the final dividend in the form of newly issued shares, shareholders should receive a dividend value which is equivalent to TTA's dividend policy. With a view towards positioning our company for longer-term growth opportunities, operating through a potentially sustained economic downturn, and considering the tight global credit and liquidity situation, management believes it is best to conserve our cash position for any potential acquisition opportunities going forward", M.L. Chandchutha said.
The Board of Directors also resolved to propose to TTA shareholders to consider and approve the reduction of TTA's registered capital by first cancelling 50,000,000 authorised but unissued shares and second increasing TTA's registered capital by another Baht 114,368,443 from the existing registered capital of Baht 818,684,422. The additional registered capital shall be allotted towards maintaining the previous 50,000,000 shares that are reserved for private placement and 64,368,443 ordinary shares to be reserved and issued for stock dividends.
"The proposed share capital increase of Baht 114,368,443 includes the 50,000,000 authorised but unissued shares reserved for private placement, which TTA shareholders approved in the 1999 TTA shareholders meeting and the 2007 TTA shareholders meeting. According to Thai law and to pay stock dividends to shareholders, TTA needs to reduce the 50,000,000 ordinary shares before registering a capital increase. Therefore, we would like the shareholders to consider and approve the previous allocation of 50,000,000 ordinary shares for private placement".
"We believe that the effect of the additional number of shares is not materially dilutive to our current shareholders and the future effect will be mitigated, given the Company's recent purchases and cancellation of our convertible bonds. We have so far repurchased and cancelled US$ 33.9 million of our convertible bonds, equivalent to 19.96% of the total issue. We hope that our shareholders will find this stock dividend beneficial in the long run, since our shareholders have effectively increased their investment in TTA at a time when our stock price is low." M.L. Chandchutha added.
The TTA Annual General Shareholders Meeting shall be held on January 30, 2009 at 2.00 p.m. at the Arnoma Grand, Arnoma Hotel, Rajdamri Road, Bangkok, Thailand.
TTA is a leader in the dry bulk shipping industry, providing liner and charter services, and is a major player in Southeast Asian offshore services through Mermaid Maritime Public Company Limited. TTA is amongst the top 50 companies listed on the Stock Exchange of Thailand with high liquidity.