Standard Chartered Private Equity Ltd (SCPE) has confirmed it will exercise its right to convert a 60-million-euro (2.47 billion baht) euro-convertible bond (ECB) issued by Thai Union Frozen Products (TUF), the world's top exporter of canned and frozen tuna and shrimp, into 45.36 million shares.
"The decision to convert the ECB into shares is a clear indication of SCPE's confidence in the outlook of TUF's business, its solid performance and strong competitiveness," said Thiraphong Chansiri, TUF's president and chief executive.
SCPE is the sole holder of TUF's ECB issued in late October 2010 as part of a financing scheme to supply funds for the canned tuna manufacturer's acquisitions in Europe.
The ECB carries a coupon rate of 5% with a four-year maturity. Without conversion, the bond would have matured for redemption later this month.
TUF's fully paid-up shares after exercising the ECB will be 1.19 billion, said the company in a statement.
"More importantly, this exercise will strengthen TUF's financial status," said Mr Thiraphong.
"By converting these debts into equity, it will immediately enhance the firm's financial strength and further reduce its debt-to-equity ratio — a key standard that leading financial institutions use to measure a company's financial health. TUF is excited that it will be able to increase its equity."
Last month the company announced it would take over the entire assets and trademark of Norway's King Oscar, a seafood brand.
The deal came several weeks after the firm signed a deal to acquire French smoked-salmon manufacturer MerAlliance.
The purchase of King Oscar will significantly increase revenue for TUF, as the Norwegian brand is distributed in 16 countries.
The deal should help TUF to sell other products in Europe, a market that would otherwise be difficult to access.
The company's first-half net profit more than doubled to 2.47 billion baht from 1.03 billion a year earlier thanks largely to the gross profit margin for TUF's tuna, frozen shrimp and pet food businesses expanding to 15.5% in the first half from 11.7% in the same period last year.
TUF shares closed yesterday on the Stock Exchange of Thailand at 73.50 baht, up one baht, in trade worth 648 million baht.