Hong Kong-listed Kerry Logistics Network Ltd (KLN) has announced a proposal to issue a convertible bond for an aggregate principal of up to 3.4 billion baht to propel Kerry Express Thailand's expansion and solidify its market leadership.
The issuance via the indirect, wholly-owned subsidiary SF Holding Company Ltd is meant to expand KLN's international express delivery business in Southeast Asia, particularly supporting Kerry Express Thailand.
According to a statement by KLN yesterday, the proposed issuance is one of many steps by the logistics firm to "re-engineer and restructure Kerry Express Thailand's systems and infrastructure".
With SF Holding Company's wide range of industrial know-how and technological experience in express delivery, backed by KLN's global presence and broad range of supply chain solutions, infrastructure investment, and logistics across 59 countries and territories, Kerry Express Thailand believes this support from shareholders will help it break through this year by increasing its operational efficiency and sustaining its market leadership position.
Kerry Express Thailand wants to use the funds to speed up its capital investments in machinery, equipment and systems that help automate work processes in many areas.
In addition, KLN intends to utilise the net proceeds from the proposed issuance to replenish general working capital and repay existing debt.
The statement said the proposal affirms support from KLN's major shareholder SF Holding Company, a leading express delivery corporation in China, to benefit Kerry's business in Thailand.
KLN holds a 100% stake in KLN Logistics (Thailand) Ltd, which is a major shareholder of Kerry Express Thailand.
The proposed issuance indicates both operational and financial support from major shareholders for Kerry Express Thailand, according to the statement.
The proposed issuance is still subject to certain pre-conditions.
According to Hong Kong listing rules, a proposed issuance takes a few months to complete.
Moreover, a scheme to support Kerry Express Thailand has not yet been finalised, nor agreed upon by its shareholders, according to the statement.