SET-listed Origin Property Plc (ORI) aims to climb into the country's top five developers after recently announcing plans to acquire luxury condo developer Proud Residence Co, owned by the Liptapanlop family, for 4 billion baht.
Origin chief executive Peerapong Jaroon-ek said his company had a sales backlog of roughly 14 billion baht at the end of March and aims to realise 6 billion in revenue in 2017, up 88%.
Proud Residence, meanwhile, has a sales backlog of 10.5 billion baht from just one project, Park24, on a 12.5-rai plot on Sukhumvit Soi 24. The luxury condo, worth 17 billion baht, will comprise two phases with five buildings and 2,076 units.
The first phase worth 6 billion baht is 74% sold. This phase will see construction completed in the fourth quarter of 2017, with some units being transferred to customers.
"If Origin's shareholders approve the acquisition of Proud Residence during an extraordinary general meeting on July 12, Origin's revenue is expected to leapfrog during 2017-20," Mr Peerapong said.
Last year, Origin's revenue totalled 3.2 billion baht, ranking 21st among more than 30 SET-listed residential developers.
The top five firms had 2016 revenue of between 20.9-46.9 billion baht: Pruksa Holding (46.9 billion), Sansiri (34.4 billion), Land and Houses (27.4 billion), Supalai (23.5 billion) and Quality Houses (20.9 billion).
Origin's gross and net profit margin ranked first and third with 45.3% and 19.9%, respectively. Its market capitalisation as of the first quarter ranked ninth among SET-listed residential developers.
Mr Peerapong said that after acquiring Proud Residence the company expects to boost its high-end condo portfolio to 30% in the next five years from zero at present.
"The acquisition will help Origin enter the luxury condo segment and expand to new markets, including new foreign customers, foreign partners and investment buyers," he said.
Currently, 49% of buyers at Park24 condo are foreigners, mainly from Hong Kong. The project also saw Hong Kong-based Fulcrum Global Capital Ltd acquire two of the five towers with a total of 400 units worth 3.5 billion baht.
The 4-billion-baht payment for Origin's acquisition in Proud Residence will consist of promissory notes worth a combined 3 billion.
The remaining 1 billion baht will be paid in cash, from which Origin will issue 81,197,171 ordinary shares at par value of 0.50 baht per share. Those shares will be being allocated to specific investors (via private placement) at a price of 12.3 baht per share.
Proud Residence is owned by three major individual shareholders: Jaraspim Liptapanlop, the 84-year-old mother of heavyweight politician Suwat; Proud Residence chief executive Thongchai Busarapan; and his wife, Nune Taweesri.
ORI shares closed yesterday on the Stock Exchange of Thailand at 11.10 baht, down 20 satang, in trade worth 86.1 million baht.