Shares of Thaivivat Holdings (TVH) on the Stock Exchange of Thailand (SET) jumped by more than 5% yesterday after the insurance firm announced Japanese trading house Itochu would buy roughly 20% of its subsidiary Thaivivat Insurance (TVI).
In a filing to the SET, TVH president and chief executive Jiraphant Asvatanakul said the company's board of directors approved a plan for TVI to increase its registered capital by 75.75 million baht to 303 million by issuing 5.75 million new ordinary shares constituting 20% of the total issued shares by way of private placement to GR Management (Thailand) Ltd.
The new shares would be offered at 13.66 baht apiece, with the total transaction valued at 1.03 billion baht, he said.
The new investor is a subsidiary of Japan's Itochu Group, a global investment company that operates a diverse and extensive portfolio of multiple industries worldwide, including textiles, machinery, metals, minerals, energy, chemicals, food, general products, realty, information and communications technology, and finance.
The group has established a strong international presence, fostering innovative investments and partnerships globally.
"The potential investment is expected to create business synergy in terms of additional funds and opportunities for future business expansion for TVI's business," said Mr Jiraphant.
Following the completion of Itochu's investment, TVH will remain the controlling shareholder of TVI, holding 79.15% of its enlarged total issued shares, he said.
The management of TVI has principally agreed on the terms and conditions of the transaction, which is expected to be completed next month, according to the filing.
TVH shares rose to 8.55 baht apiece in late afternoon trade yesterday.
Kazushi Kawai, general manager of Itochu insurance business, told Nikkei Asia the investment reflects the potential of the insurance industry in Thailand, which has grown more than in developed markets.
"We are seeing insurance gradually penetrate the market," he said, emphasising the investment decision is related to confidence in the future potential of the Thai market.
Most of TVI's business is generated from auto insurance.
Data indicated the insurer held a 3% share in the non-life insurance market in 2022, ranking 11th in terms of revenue among more than 40 players in the general insurance market.
The agreement with Itochu will create business cooperation in terms of additional capital and future expansion opportunities for the Thaivivat insurance business, said Mr Jiraphant.
