BANGKOK, July 13 (Reuters) – Thai Chemical Company PTT Global Chemical Pcl PTTGC.BK said on Tuesday it would not need to raise capital to fund a 4 billion euros ($ 4.74 billion) acquisition of German coating resin maker Allnex.
Its shares rose 6% on Tuesday, recouping losses from a day ago as investors worried about a new issue of shares.
“We don’t need to raise capital as some expected,” Managing Director Kongrapan Intarajang told reporters in an online briefing.
“We have enough liquidity, a capital increase is far away.”
The acquisition will be financed with cash and loans, said its chief financial officer Pattaralada Sa-Ngasang.
The company has approximately 123 billion baht ($ 3.77 billion) in cash, Pattaralada said.
It also had a letter of credit from its parent company, the state-owned PTT Pcl PTT.BK, for 32 billion baht and a two-year loan agreement for 74 billion baht with the PTT.
“Banks have also offered loans of up to almost $ 1 billion,” she said.
Combined sources of The funds amounted to more than 155 billion baht, PTTGC said, above the 148 billion baht needed for the deal.
The deal is expected to be concluded by the end of the year pending regulatory approval and would have no impact on the company’s ability to pay dividends, he said.
Allnex, whose products are used in the metal, automotive and packaging industries, has annual sales of € 2 billion and employs 4,000 people worldwide.
The acquisition would bring PTTGC closer to its goal of expanding the contribution of performance and green chemicals to a quarter of revenue by 2030, up from 10% currently, Kongrapan said.
The company also aims to have 30% of its activities abroad by 2030, up from 16% in 2019.
($ 1 = 0.8440 euros)
($ 1 = 32.6200 baht)
(Report by Chayut Setboonsarng edited by Ed Davies)
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