BANGKOK (Reuters) – Thai chemicals company PTT Global Chemical Pcl said on Tuesday it would not need to raise capital to finance a € 4 billion ($ 4.74 billion) acquisition of the German maker of Allnex coating resins.
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, its chief financial officer Pattaralada Sa-Ngasang said.
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, state-owned PTT Pcl, for 32 billion baht and a two-year loan agreement for 74 billion baht with PTT.
“Banks have also offered loans of up to almost $ 1 billion,” she said.
The combined sources of funds stood at 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)
Reporting by Chayut Setboonsarng; Editing by Ed Davies