SHIPPING

Shareholders of the SET-listed shipping company Thoresen Thai Agencies (TTA) yesterday approved a planned capital increase to raise 6.37 billion baht to purchase 11 dry-bulk vessels over the next two years.

They hoped the shipping business will recover then.

In the short term, the company projected operating losses over the next two quarters before returning to profit for all of 2013.

TTA will increase capital to 1.132 billion baht from 708 million baht by issuing 283,201,765 shares to the existing shareholders.

The ratio is two new shares at 14 baht each for every five existing shares held during the subscription period during Feb 21-28 this year.

Free warrants will also be issued to all shareholders who subscribe to the new shares at a ratio of one warrant to two newly subscribed shares. Each warrant can be converted into one new share at a price of 17 baht.

Under the structure, TTA hope to raise 3.97 billion baht in cash from the rights offering, and up to 2.41 billion baht over the next 21/2 years from the exercise of warrants, for a combined total of up to 6.37 billion baht.

ML Chachutha Chandratat, TTA's CEO, said the company has a 15-billion-baht investment plan over the next three years and will borrow banks for the shortfall of 7-8 billion baht.

Under the plan, the company will expand its fleet from 16 to 27 dry-bulk vessels by 2015 and will invest in related businesses.

"The shipping business will recover in 2014-15 in line with the world economy, and we expect the freight rates to increase then," said ML Chanchutha.

He said if the Baltic Dry Index, a benchmark for shipping rates, increased above $9,500 per day, TTA will book a profit. It stays at around $8,000 per day now.

For this year, it expects revenue to come mainly from Mermaid Maritime, a subsidiary, while the coal business will lose in the first half before recovering in the latter, he said.

Shares of TTA closed on the Stock Exchange of Thailand at 18.60 baht yesterday, up 50 satang, in trade worth 159.68 million baht.