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TTA announces proposed rights offering; aims to further capitalise on future opportunities

Back Nov 28, 2013

Bangkok, Thailand, 28 November 2013 -- Thoresen Thai Agencies Public Company Limited ("TTA") today announced plans for a capital increase to raise up to THB 4,173 million via a rights offering ("RO"). The announcement follows a successful, oversubscribed RO and warrant issue concluded in March 2013. TTA plans to use the proceeds to invest in its key subsidiaries and associate companies, taking advantage of market opportunities in dry bulk shipping, oil & gas services and infrastructure.

Shareholders will be entitled to exercise their rights by subscribing to three newly issued shares at a price of THB 14.00 per share for every 10 existing shares they own. In addition, free warrants (TTA-W4) will be issued to shareholders who subscribe for new shares at a ratio of one warrant to three newly subscribed shares. Each warrant can be converted into one common share at an exercise price of THB 18.5 within 36 months of the warrant issuance. Shareholders will be entitled to subscribe for excess rights, which will be capped at 50% of their total shareholding at 7 February 2014, and oversubscribed allocations will be provided based on percentage of shareholding.

At THB 14.00 per share, the RO price represents a discount of approximately 16.7% on TTA's weighted average share price over the last 15 days. Meanwhile, the exercise price for TTA-W4 reflects a 10% premium of the 15-day weighted average, as a result of a longer exercise window and the improved prospects for the company in both the short and medium term. The capital increase proposal will be subject to shareholder approval at TTA's Annual General Meeting of Shareholders ("AGM"), which will be held on 30 January 2014. The RO subscription period has been tentatively set from 25 February to 3 March 2014.

Mr. Chalermchai Mahagitsiri, TTA's incoming President & CEO said, "As a holding company, TTA must remain agile in order to capitalise on market opportunities across any one of its businesses. With vessels still at bottom-of-the-cycle prices, analysis by our Board and management has concluded that a strong opportunity remains to expand the Thoresen Shipping Singapore Pte ("Thoresen Shipping") fleet in expectation of a recovery in the short to medium term. At the same time, we see strong impetus for additional investment in Mermaid Maritime Public Company Limited ("Mermaid") as exploration and production activity continues to ramp up in many of our key markets. Finally, our Vietnam investments, from the deep water port at Phu My, to a fast-growing fertiliser and warehouse business, have all performed tremendously, opening the door to further investment."

While THB 4,000 million in funds from the RO will be put towards short and medium term investment opportunities, an additional THB 1,838 million, which will potentially be raised from the exercise of TTA-W4 by 2017, will be used to retire debt or be earmarked towards other future opportunistic investments.

"As a shareholder, I once again pledge my full support towards this plan and intend to exercise my full rights to support TTA's growth and longterm profitability. I hope fellow shareholders share my view that the upside of this investment is indeed an attractive one." Mr. Chalermchai Mahagitsiri concluded.