Tisco Group issuing TSRs to raise cash

Tisco Financial Group, the holding company of Tisco Bank, will increase capital by 1.74 billion baht through the issue of transferable subscription rights (TSRs).

A TSR is an instrument issued by a listed company to all shareholders when it increases capital through a rights offering.

Shareholders receive TSRs in proportion to their shareholding and have the option of exercising their subscription rights or selling them.

Chief executive Oranuch Apisaksirikul said 72.8 million TSRs will be offered to existing shareholders at the rate of one TSR for 10 existing shares.

Each TSR can be converted into one new common share at the price of 24 baht each.

Shareholders not wishing to convert can sell the rights.

To support the conversion, Tisco will issue 72.9 million new shares and expects to raise 1.74 billion baht from the TSRs.

Shareholders will meet on April 25 to approve the plan, said Mrs Oranuch.

Tisco also yesterday approved a cash dividend for last year's operation of 2.40 baht per share or 47% of net profit.

Mrs Oranuch said Tisco Group does not need to raise capital for business expansion and the TSRs are being offered as a type of dividend for shareholders.

"Dividend payment via this new instrument offers shareholders a greater investment choice. We believe it will be of appropriate benefit to shareholders, as it is expected to provide better returns among the positive trend of the SET index," she said.

Tisco's capital-adequacy ratio is 13.24% including 9.03% in tier-one capital covering loan expansion over the next few years.

For this year, Tisco Bank targets loan growth of 15-20%.

The bank enjoyed healthy loan expansion of 32.2% in 2010, 23.6% in 2011 and 34.2% last year on a solid capital base without a capital increase.

Shares of TISCO closed yesterday on the Stock Exchange of Thailand at 54.25 baht, up one baht, in trade worth 192 million baht.

About the author

Writer: Somruedi Banchongduang
Position: Business Reporter