29 July 2004 10:53 [Source: ICIS news]
SINGAPORE (CNI)--The debt plan administrator of Thailand’s NFC Fertlizer (NFC) has recommended that its shareholders reject a recent tender offer made for all outstanding shares in the company, it was revealed on Thursday.
A statement to the Stock Exchange of Thailand (SET) on Thursday said that on 23 July a tribunal representing the debt plan administrators rejected the tender offer as undervalued by a two-thirds vote.
The opposition argued that the company’s shares, using an price-to-book-value accounting method, should be valued at Baht23.70-Baht31.12 per share, or more than double the Baht11.50 being offered under the tender.
They argued that the pricing of the offer does not take into account the company’s future business operations pending the success of its rehabilitation plan.
The shareholders’ advisor, Advisory Plus Co (APC), had provided the adjusted book value estimate along with estimates made using four other accounting techniques.
Under a straight book value assessment, each share would have a negative value of Baht2.75, under a market-value method Baht0.08, using a adjusted book value method Baht23.7o-Baht31.12 and under a discounted cash flow method each share would be valued in the Baht6.79-Baht6.51 range.
They said that shareholders should note that NFC’s share price would likely grow in value pending the successful resolution of the debt restructuring deal.
The late rejection of the tender offer was unexpected, as the consortium that had made the bid was earlier chosen as a strategic investor by NFC’s debt-plan administrator.
The 10-member consortium is led by NFC’s CEO Nuttaphob Ratanasuwanthawee and includes the director of Thaipicon and Industry Co, Direk Chatpimonkul. Thaipicon was picked as a strategic investor for NFC along with China’s Xiyang Group.
Nuttaphob on 5 July announced a Baht1.72bn ($42.2m/Euro34.3m) tender offer for all the shares in NFC he does not already own. Nuttaphob, who is also chairman of Thai chemicals logistics company SC Group, was obliged to launch the tender offer for NFC under Thai stock exchange rules when his shareholding in the company rose above the 25% trigger mark.
CNI was earlier this month told that NFC was near the end of its debt-restructuring process and the company could not foresee any problems with the new group of investors gaining control of the company. A source close to the bid had noted that the remaining major creditor, the Thai Asset Management Corp (TAMC) was not expected to have any objections to the tender offer.
The state-run TAMC was founded in 2001 by the Thai Prime Minister Thaksin Shinawatra to buy non-performing loans from banks and assist companies in restructuring their debt.
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