Indorama's IPO expected to raise 1 bln Baht

04-Jul-05

With the expectation to raise at least one billion baht, Indorama Polymers Plc, Thailand based manufacturer of polyethylene terephthalate (PET), has scheduled an IPO by the end of this month. IPO proceeds will be utilized to repay the company's outstanding debt of 2.3 billion baht, as well as for further investment. Indorama is to float about 368 million new shares on the Stock Exchange of Thailand as well as have 48 million shares available under a greenshoe option at a par value of about one baht per share. Share holding of the Lohia family will drop from 85% to 75%, as post IPO, the company's registered capital rises to 1.45 billion baht from 1.06 billion The company's outstanding debt currently standing at 2.3 billion baht, is expected to climb to 3 billion baht by the end of 2005. In addition to this, Indorama has taken loans to help finance an investment in its subsidiary in Lithuania and finance an increase in production capacity of Petform (Thailand) Ltd, its 51% joint venture with SET-listed Serm Suk Plc. Besides these debts, the company also needs the funds to finance expansion plans- probably acquisition of PET units to meet growing demand. Demand for PET currently has been increasing by 15-20% in Thailand and 10% globally, on a yearly basis. Indorama expects to increase its global market share of PET from the current 2% to 3.5% in 2006. Th eahsrp climb in Indorama's revenues from 1.4 billion baht in 2002 to 5.1 billion in 2003 and 9.3 billion baht in 2004 can be attributed to increased production volume from the expansion of its existing operations and the purchase of two companies, Asia Pet (Thailand) Ltd and Starpet Inc.