Thai Coconut Plc, one of Thailand’s coconut product leaders, is planning to issue 150 million shares in a bid to raise 600 million baht ($18.41 million) through its initial public offering (IPO).
The IPO is expected to be launched during the second half of this year.
The shares offered during the IPO will be equivalent to 27 per cent of the company’s paid-up capital, of which, the par value is marked at one baht apiece.
It will appoint a financial advisor and underwriters in this quarter and submit the filing in the second quarter.
Of the estimated 600 million baht raised from IPO, 500 million baht will be used to repay the debt in a bid to reduce the annual interest of 30 million baht and lower the debt-to-equity ratio rate to 0.65 times. The remaining 100 million baht will go toward boosting its production capacity, revealed the company officials.
“We want to increase our capacity to produce more coconuts as the annual demand is expected to grow by 30-50 per cent over the next three to five years. Especially the market of ready-to-drink coconut juice is rapidly expanding because of the health trend,” said company’s chief executive Chunya Thanasakpatr.
Thai Coconut plans to invest around 900 million baht over the next three to five year period. The company will be investing in coconut gardens in the central region to reduce the risk of coconut shortage and price fluctuation. Together with this, it is planning to set up a coconut processing plant in Indonesia. These two projects are to be implemented before 2018 and will have an outlay of 600 million baht.
To utilize every part of coconut and add more value to the waste, the company will be spending 300 million baht to establish a five-megawatt biomass power plant that uses coconut shells as a feed-stock to produce the electricity.
According to Thanasakpatr, the source of fund for these future projects would come from the IPO and company’s accumulated profit.
Thai Coconut has set a revenue target of 3.3 billion baht this year; up 56 per cent from last year. Around 93 per cent of its revenue comes from exports and the remaining 7 per cent from the local food industry.
The gross profit is expected to surge by 147 per cent, from 380 million baht in 2014 to 940 million baht in 2015 because of lower production cost, per unit. This has happened due to cheaper coconut import from Indonesia and a better bargain with packaging suppliers.
Currently, the company has a registered capital of 550 million baht, of which 400 million baht is paid-up. It produces a wide range of coconut products and exports to 53 countries worldwide. The main customers include, Coca Cola Inc, Linbro Inc, Trader Joe and most of the modern trade leaders including Sainsbury’s in United Kingdom, Directus in Australia, McCormick in Switzerland and Pan Asia Food in Canada.