TTA proposes a potential convertible bond offer

Back Dec 20, 2010

The Board of Directors of Thoresen Thai Agencies Public Company Limited ("TTA") on 14 December 2010 approved the potential launch of up to US$ 140 million of convertible bonds which will comprise an exchange offer to all holders of the existing convertible bonds issued in 2007, of which US$ 68.6 million are currently outstanding, and a concurrent new offering.

M.L. Chandchutha Chandratat, TTA President and Chief Executive Officer, said "the potential convertible bond exchange offer and new issue are part of TTA's capital management strategy. This transaction will allow TTA to lengthen our debt maturity profile while maintaining a sufficient level of capital to take advantage of future business opportunities. This could be the second time we will be tapping the international convertible bonds market. We have a strong name in this market and intend to offer existing convertible bondholders the opportunity to exchange into new convertible bonds, which will have a longer tenor, and raise a modest amount of new capital to expand our businesses. It is important to note that we remain careful about the company's total leverage and US$ 140 million will be the maximum amount of outstanding convertible bonds from both issues. The consummation of any transaction would remain subject to shareholder and regulatory approvals."

M.L. Chandchutha also said "TTA's strategic objective is to create a balanced and diversified business portfolio across Transport, Energy, and Infrastructure lines to ensure more stable cash flows to meet our debt, equity, and investment obligations. This capital management strategy allows TTA to continue a disciplined dry bulk fleet renewal program, increase the Energy and Infrastructure lines of businesses, and maintain a prudent capital structure. In essence, the company is moving early to remove upcoming refinancing obligations. The proposed issue also enables TTA to raise a modest amount of additional capital today and fixes our funding costs in a potentially rising interest rate environment over the next few years."

The proposed issue of convertible bonds is expected to have a tenor of 5 years with an option to be redeemed prior to the maturity and can be settled in cash or in the form of new TTA shares upon a conversion. The company had reserved shares equal to 21% of outstanding shares on issue for the 2007 convertible bonds and at this time no shares have been issued in connection with that instrument. For the proposed new convertible bond, TTA will not seek shareholder approval to reserve a higher percentage of outstanding shares than previously sought and approved for the existing convertible bonds.

On features of the proposed convertible bond, M.L. Chandchutha said, "TTA has the ability to avoid, defer, or minimize equity dilution through the use of the convertible bond. Terms of the proposed convertible bond include a cash settlement option for the company in the event of equity conversion by holders. This will allow TTA to avoid or minimize dilution by settling the conversions in cash. Furthermore, if the convertible bonds are redeemed, TTA will also have an option to settle the redemption in cash or shares. The tenor of 5 years will extend the current convertible bonds maturities from 2011 and 2012 out to 2016. These features will provide TTA a great degree of flexibility in optimizing its capital structure and reducing dilution."

M.L. Chandchutha also noted, "We are requesting shareholders approval for the new convertible bond transaction to maximize our financial options. Apart from this potential transaction, we have an existing approval to issue up to Baht 6 billion of bonds. We will choose the option that is most attractive for the company and provides us with a platform to create value for existing shareholders."

For further information, please contact Thoresen Thai Agencies PCL (phone +662 250 0569 Ext 363 Charmaine or charmaine_u@thoresen.com, Ext 544 Amata or amata_i@thoresen.com) or Macquarie Securities (Thailand) Ltd (phone + 662 694 7837 Duangporn).


About TTA
Thoresen Thai Agencies Public Company Limited ("TTA") is a strategic investment holding company listed on the Stock Exchange of Thailand. Its investment strategy is to grow through a balanced and diversified business portfolio of transport, energy, and infrastructure assets, both domestically and internationally. Previously, TTA has primarily invested in the dry bulk shipping and related shipping services businesses. The company has since expanded its investments into other business areas, such as offshore services through Mermaid Maritime Public Company Limited, fertilisers and logistics through Baconco Co., Ltd., coal-related businesses through Merton Group (Cyprus) Limited and Unique Mining Services Public Company Limited, petroleum tankers through Petrolift, Inc, and ports through Baria Joint Stock Company of Service for Import Export of Agro Forestry Products and Fertilizers.

For media inquiry, please contact:
Corporate Communications Department, Thoresen Thai Agencies PLC. Tel: 02 254 8437
Ravisada Angkeeros (ravisada_a@thoresen.com) ext. 393 OR Ornsutee Kanchanomai (ornsutee_k@thoresen.com) ext. 290