SET-listed mobile distributor Jay Mart has announced plans to take over direct sales and consumer loan firm Singer Thailand by 2018 as it strives to strengthen its loan portfolio.
Jay Mart will make a tender offer to Singer shareholders to expand the 24.9% stake it acquired in 2015. The acquisition is meant to strengthen management control of Singer Thailand and broaden Singer Thailand's SG Capital customer base.
Jay Mart chief executive Adisak Sukhumvitaya told the Bangkok Post that the plan needs approval at Jay Mart's annual shareholder meeting next year. The company has hired Asia Plus Securities to carry out the plan, a process expected to take five months before issuing the tender offer.
"I aim to hold a 100% stake in Singer Thailand after finishing the tender offer process," Mr Adisak said. "The company has prepared more than 1 billion baht for the deal."
After the deal is finished, the company plans to file for SG Capital to be listed on the Stock Exchange of Thailand by 2019, Mr Adisak said.
"SG Capital will strengthen our retail business ecosystem in the long term," he said. It will also provide Jay Mart with access to Singer's high-interest loan networks nationwide.
Singer has 200 distribution outlets, which under the plan would be combined with 250 of Jay Mart's distribution channels.
Mr Adisak said SG Capital mainly provides financial loan services for customers who buy Singer products. Jay Mart plans to expand the loan services of SG Capital to mortgages and pawnshop services such as cars for cash.
The financial loan service of SG Capital operates under permission granted by the Consumer Protection Board and the Commerce Ministry. In that way the service differs from financial technology (fintech) services that require approval by the Bank of Thailand before operating.
In January this year, Jay Mart transformed itself into a holding company. The flagship mobile phone business operates under newly established Jaymart Mobile Co, which is 99% owned by Jay Mart.
The six subsidiaries of Jay Mart are Jaymart Mobile, the handset distributor arm; JMT Network Services, providing debt management and business loans; JAS Asset, which manages leased retail space in shopping centres and runs the property business; J Capital, a joint venture investment arm in Myanmar; J Fintech (formerly known as JMT Plus), a provider of personal loans; and J Ventures, which develops technology and digital platform services.
Jay Mart, JMT Network Services and JAS Asset are SET-listed companies with a combined market capitalisation of more than 30 billion baht.
Mr Adisak said SG Capital will be developed to complement the traditional loan service of the group, while J Fintech will handle personal loans in that dynamic market.
"Our business ecosystem is entirely related to retail businesses and services for retail consumers, which is the biggest segment for business opportunities," he said.
Mr Adisak said Jay Mart's growth owes to its diversified subsidiaries and their synergy, each arm complementing the others under the retail business umbrella.
"We would not be involved in expanding the loan services portfolio if we did not have JMT Network Services, which provides debt management and business loans strong enough to guarantee our success," he said.
Mr Adisak said Jay Mart's market cap on the SET grew by seven times from 2009 to reach 12 billion baht in 2017 and should reach 40 billion baht in 2020.
JMART shares closed Monday on the SET at 18.60 baht, down 50 satang, in trade worth 101 million baht.
SINGER shares closed at 13.20 baht, down 20 satang, in trade worth 16.5 million baht.