SCG Chemicals Ltd, a subsidiary of Siam Cement Group (SCG), offered to buy the rest of the shares it does not already own in Thai Plastic and Chemical Plc (TPC), then plans to delist the company from the Stock Exchange of Thailand (SET) to make its management more flexible.
Roongrote Rangsiyopash, president and chief executive of SCG, which owns a 100% stake in SCG Chemical, said in a statement to the SET that the board of directors approved a resolution to undertake a tender offer for delisting shares of TPC, a PVC producer.
SCG and SCG Chemical hold 91.06% of issued and paid-up shares of TPC, leaving 8.94% held by small investors that they would have to purchase.
Mr Roongrote said there is no need to raise capital on the SET as TPC has sufficient funds for working capital. If TPC needs to raise capital in the future, it can do so from other sources or from SCG or SCG Chemicals, he said.
"This move will bring more flexibility in its business management," Mr Roongrote said in a statement.
The 8.94% stake is equivalent to 78.2 million shares, for which SCG Chemical said it would pay 40 baht per share, making the tender offer worth 3.13 billion baht.
SCB Securities Company Ltd was assigned to be the tender offer agent.
Funding for this transaction is expected to be a loan from SCG as well as cash from operations of SCG Chemical, he said.
Established in 1966, TPC started business as a producer of PVC and its derivatives. It was listed on the SET in April 1984.
TPC posted a net profit of 979 million baht in the third quarter this year, up 290 million in the same period last year because of rising PVC prices.