JARDINE Cycle & Carriage (C&C) is raising US$772 million (S$1 billion) from a one-for-nine rights issue to help fund its purchase of a 24.9 per cent stake in Siam City Cement Public Company.
The 39.52 million rights shares will be priced at S$26 each, the company said in an exchange filing on Thursday evening.
The price is a 27.9 per cent discount to its S$36.06 closing price on Thursday.
Yesterday, the stock fell 45 cents or 1.25 per cent to S$35.61.
Jardine C&C, together with its subsidiaries and associates, employs 253,000 staff members across Indonesia, Vietnam, Singapore, Thailand, Malaysia and
Myanmar, the company said on its website. The biggest contribution to its profits comes from its 50.1 per cent stake in listed Indonesian conglomerate Astra International, which has interests in industries ranging from automotive distribution to heavy equipment to financial services.
In Singapore, Cycle & Carriage sells Mercedes-Benz, Mitsubishi, Kia and Citroen cars.
Jardine C&C said Jardine Strategic Holdings, which has an indirect stake of 74.34 per cent in the company, will subscribe to 29.38 million of the rights shares to match its stake.
Explaining the rationale for the rights issue, Jardine C&C said it bought the 24.9 per cent stake in Siam City Cement, a maker and distributor of cement products in Thailand, in April for US$615 million.
It was funded by drawing down two loan facilities totalling US$626 million it had with HSBC and Bank of Tokyo-Mitsubishi UFJ.
Proceeds from the rights issue will now be used to repay these term loans (82 per cent), and for repayment of other company short-term debts (6 per cent).
The other 12 per cent is for general corporate purposes, Jardine C&C said.
CLSA Singapore, Morgan Stanley Asia (Singapore) and the Singapore branch of HSBC are the joint underwriters for the rights issue.
The Singapore Exchange has given in-principle approval for the rights shares to be quoted on the bourse.
For its first quarter to the end of March, Jardine C&C reported a 14 per cent drop in revenues to US$4.02 billion, compared with the same period a year ago. Net profit fell by 23 per cent to US$386 million.