Kaset Thai International Sugar Corporation (KTIS), Thailand's third-largest sugar producer, plans to float 957.83 million initial public offering (IPO) shares from April 21-23 to raise funds for expansion.
Of the IPO shares, representing 24.64% of the company's paid-up capital, 585.43 million will be newly issued shares, while the remaining 327.4 million will be existing shares held by its shareholders. The IPO price has not been finalised yet.
Proceeds will be used to construct a biofertiliser plant worth 50 million baht and two biomass plants each costing 960 million, while another 980 million will be used to raise capacity for liquid sucrose and super refined sugar.
KTIS has appointed Kasikorn Securities as its financial adviser for the IPO, with KT Zmico Securities and Maybank Kim Eng Securities as lead underwriters.
Its debut on the Stock Exchange of Thailand has been slated for April 28.
KTIS plans to earmark a portion of its IPO shares to sugar cane growers at the same price as shares to be subscribed by general investors, said chief executive Praphan Siriviriyakul.
After completing its investment plan, the company will have nine factories — three for sugar cane, three for biomass and one each for biofertiliser, ethanol and pulp and paper,
Sugar generates 70-80% of its revenue and net profit, but biomass and ethanol will overtake sugar in the future because renewable energy contributes a steady flow of revenue and profit, while sugar is a commodity with a fluctuating price.
Mr Praphan said global sugar demand is expected to increase this year as Brazil, the world's top exporter, is facing a drought, presenting an opportunity for Thailand's sugar producers to boost exports.
"The global sugar price has increased 18 cents from early in the year, so it is a good trend for the industry this year," he said.
KTIS has sugar production capacity of about 88,000 tonnes per year, and it aims to increase its refined sugar capacity and export volume through foreign partners, especially Sumitomo, which holds a 7.5% stake in the company.
KTIS reported revenue of 18.05 billion baht last year.