Siam Cement Group (SCG) says it has postponed its initial public offering (IPO) plan for its subsidiary SCG Chemicals Plc (SCGC), without providing a specific timeline, due to the company's significant size, coupled with unfavourable economic and investment conditions this year.
Roongrote Rangsiyopash, president and chief executive of SCG, revealed information regarding the progress of the IPO plan for SCGC yesterday, noting that the company had obtained approval from the Office of the Securities and Exchange Commission (SEC) on April 12, 2023 to extend the IPO approval period until Oct 4, 2023. This cannot be extended further, in accordance with the relevant notifications of the Capital Market Supervisory Board.
In this regard, the company has considered the suitability of the IPO and the listing of SCGC's shares on the Stock Exchange of Thailand (SET) by taking into account relevant factors which include the readiness of both Thai and foreign capital market investors to take on a sizeable IPO of a Thai company at this time, as well as external circumstances such as the energy crisis, financial market conditions and investor confidence.
"The company has decided that it may not be appropriate to proceed with the IPO at this time. Nevertheless, SCG remains confident that SCGC, as a leading integrated chemicals player in Asean, has growth potential through its business expansion and business partnerships with globally leading petrochemical businesses," Mr Roongrote said.
He added that SCG intends to proceed with the SCGC IPO in due course after the situation has improved, including resubmitting an application for the IPO approval as well as a registration statement and draft prospectus (filing) to the SEC. The company will further provide updates to investors and stakeholders on any significant progress regarding such proceedings.
SCGC is one of SCG's main revenue contributors, after its spinoff and filing to the SEC to prepare for fundraising and to be listed on the SET.
SCGC is potentially one of the most valuable IPOs in Thailand with a registered capital of roughly 114 billion baht. When listed on the SET, it would be added to the SET50 and SET100 indices within three business days, according to the fast-track listing criteria.
SCGC is looking at listing up to 3.85 billion shares, representing 25.2% of the company.
Engaged in the petrochemical business, SCGC recorded revenue of 239 billion baht in 2022, up 62.3% from the previous year, and accounted for 45% of SCG's total revenue.
SCGC's net profit was 43.1 billion baht, an increase of 129% from the previous year, representing 61% of SCG's profit. Total assets were 377 billion baht, equivalent to 43.8% of SCG's total assets. It could be said that SCGC is SCG's flagship unit in terms of income, profit and assets.
For SCGC, the IPO proceeds would fund domestic and international business expansion, strengthen liquidity as well as providing working capital for the future.