Sri Trang Agro-Industry IPO

Sri Trang Agro-Industry IPO closed yesterday. The pricing, however, is delayed to Tuesday from Monday due to unfavourable market conditions. Wait that means today, and we still have not known the final price of this IPO? Unfavourable market conditions for this particular stock? Not good. For sure I'll give it a miss.

SRI Trang Agro-Industry has launched its offering of new shares for a dual listing on the Singapore Exchange (SGX) to raise up to $448 million - higher than the $360 million that the market was expecting.

The world's largest processor of natural rubber is offering 280 million shares at a maximum price of $1.60 apiece. Net proceeds are expected to total up to about $427 million. The issue comprises 266 million international placement shares and 14 million public offer shares.

Sri Trang said the final price will be determined on Jan 24 after the completion of a book building process. The total Singapore offering represents 22 per cent of Sri Trang's enlarged share capital.

Sri Trang will continue to trade on the Stock Exchange of Thailand (SET), where it has been listed since August 1991. Its shares sank 0.75 baht to close at 37.5 baht yesterday. Sri Trang's market capitalisation stood at 36 billion baht (S$1.51 million) on Dec 31, 2010.

The company plans to channel $277.6 million of the expected net proceeds to expanding its rubber processing facilities to take production capacity up to 1.5 million tonnes annually by 2012. It now has 21 facilities in Thailand and Indonesia that produce 860,259 tonnes a year.

About $85.4 million will be used to purchase up to 8,000 hectares of additional land or rubber plantations over the next four years. The remaining $64 million will go towards Sri Trang's general working capital.

Joint issue managers, bookrunners and underwriters for the IPO are JPMorgan (SEA), CIMB Bank Singapore, and Standard Chartered Securities (Singapore). JPMorgan (SEA) is the sole global coordinator for the offering.

The public offer in Singapore closes on Jan 24 and share trading is expected to start on Jan 28.

From Business Times, "Sri Trang IPO seeks $448m in SGX dual listing". (21/01/11)

The Thai stock exchange suspended trading in rubber producer Sri Trang Agro-Industry yesterday ahead of the pricing of a Singapore initial pubic offering (IPO), which has depressed its share price in Bangkok.

The world's largest processor of natural rubber is expected to raise up to S$360 million through its listing on the Singapore exchange. Singapore is a big centre for rubber trading and the company already has a subsidiary there.

Thailand's largest publicly traded rubber maker initially announced plans for a dual listing last May and it was scheduled for September but global market uncertainties caused a delay.

Since the latest Singapore listing plan was announced on Jan 13, Sri Trang shares have dropped 10 per cent from around 41 baht to 36.75 baht on Friday as some investors expected the IPO price to undercut the Bangkok price.

The company, currently valued at US$1.2 billion on the Thai bourse, has said that it would offer 280 million shares at a maximum offer price of S$1.60. Its closing price in Bangkok on Friday is equivalent to about S$1.53.

The company said that it planned to use the proceeds from its new share offer to acquire and build processing facilities, pursue acquisitions and for working capital.

Sri Trang will continue to trade on the Thai bourse, where it has been listed since August 1991. It primarily makes blocked rubber for tyres and counts Bridgestone Corp, Michelin and Goodyear Tire & Rubber among its big buyers.

From Business Times, "Sri Trang suspended in Thailand ahead of S'pore IPO". (25/01/11)



Update: Sri Trang dips below offer price in debut trading. Not a good start.

UNABLE to hold on to the gains it made, shares of the world's largest rubber producer and exporter, Sri Trang Agro-Industry, finished the first trading day on the Singapore Exchange one cent below its offer price of $1.20.

The 0.8 per cent fall yesterday came after investors pushed the secondary-listing stock to a high of $1.25 following its $1.15 opening. But Sri Trang, whose primary listing is in Thailand, surrendered those gains before dipping below its listing price. About 33.7 million shares changed hands.

Over on the Stock Exchange of Thailand (SET), Sri Trang's shares continued to dive to close 5.7 per cent lower at 33 baht (about S$1.36) for a price-earnings ratio of 10.85. The company's shares have been falling since it announced plans for the secondary listing on SGX, with investors expecting the offer price to undercut its trading price in Bangkok and amid poor market conditions in Thailand. It was the best performer last year among the 479 members of the SET gauge, soaring 696 per cent as rubber futures rallied, according to Bloomberg data.

Its lacklustre performance on the SET following the secondary listing announcement led the firm to delay the pricing of its Singapore offer by two days, before setting one that was significantly below its stated maximum of $1.60 - which would have helped the firm raise $448 million, based on 280 million new share issues. The company ultimately netted $336 million in gross proceeds, and its share sale was 0.81 times subscribed.

Sri Trang currently has 21 facilities in Thailand and Indonesia that produce 860,259 tonnes of rubber a year. It is also looking to acquire additional land or rubber plantations over the next few years.

Last Wednesday, the company confused investors when it suddenly said in an announcement on the SET that it was abandoning plans to list in Singapore amid poor market conditions in Thailand. It then revoked its statement, saying that it was an error.

From Business Times, "Sri Trang dips below offer price in debut trading".

0 comments:

Post a Comment

Blog Archive