SCG Packaging seeks to raise up to $1.7 billion in Thai IPO

BANGKOK (BLOOMBERG) - SCG Packaging, Thailand's biggest packaging company, plans to raise as much as 39.5 billion baht (S$1.72 billion) in the nation's second-largest initial public offering (IPO) this year.

The unit of Siam Cement, one of the country's largest industrial conglomerates, set a price range of 33.50 baht to 35 baht for its 1.13 billion share offering, according to its filing with Securities & Exchange Commission on Monday (Sept 21). The company will sell an additional 169 million new shares should a so-called greenshoe option be exercised in full, the filing said.

SCG Packaging's initial share sale is set to be Thailand's second largest this year after Central Retail Corp's 78 billion baht offering in February. King Maha Vajiralongkorn is the biggest shareholder of its parent Siam Cement with 33.64 per cent stake, according to the company's website.

Asian IPOs sprung back to life following a slowdown amid the coronavirus outbreak, with a flurry of new listings in Hong Kong and China and reviving activity in India amid abundant liquidity following a lull triggered by the novel coronavirus pandemic. SCG Packaging's IPO was approved in May but the company later had said it was unsure about the timing amid the spread of the virus.

"The packaging business has become a crown jewel of Siam Cement with the explosive growth of e-commerce and food-delivery demand amid the pandemic," said Tawatchai Asawapornchai, deputy managing director at ASL Securities. "The company may view the window of opportunity as small with no ending of the coronavirus outbreak any time soon."

SCG Packaging has already allocated 677 million new shares, or 60 per cent of the offering, to 18 local and foreign funds as cornerstone investors, the filing showed. Kasikorn Asset Management and BBL Asset Management are the biggest buyers among 14 domestic institutions, while Avanda Investment Management and NTAsian Discovery Master Fund are among the largest international investors.

The company plans to use proceeds from the offering to fund business expansion and new acquisitions as well as debt repayment, according to its filing. Its net income in the first half of this year jumped 40 per cent to 3.64 billion baht, while total sales climbed 11 per cent to 45.9 billion baht.

Shares will be offered to domestic and foreign investors from Sept 28 to Oct 14, according to the filing. The company will announce the final pricing on Oct 8.

SCB Securities and Bualuang Securities are the lead arrangers for the domestic offering, while Morgan Stanley and UBS Group are managing the international sales.