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SCG Packaging Seeks to Raise Up to $1.27 Billion in Thai IPO

Bloomberg logoBloomberg 9/21/2020 Anuchit Nguyen
a sign in the dark: The Stock Exchange of Thailand (SET) logo is reflected in a window at the stock exchange in Bangkok, Thailand, on Tuesday, Feb. 12, 2019. Uncertainty surrounding the Thailand's national elections will have an impact on equities, according to Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd. © Bloomberg The Stock Exchange of Thailand (SET) logo is reflected in a window at the stock exchange in Bangkok, Thailand, on Tuesday, Feb. 12, 2019. Uncertainty surrounding the Thailand's national elections will have an impact on equities, according to Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd.

(Bloomberg) -- SCG Packaging Pcl, Thailand’s biggest packaging company, plans to raise as much as 39.5 billion baht ($1.27 billion) in the nation’s second-largest initial public offering this year.

The unit of Siam Cement Pcl, one of the country’s largest industrial conglomerates, set a price range of 33.50 baht to 35 baht for its 1.13 billion share offering, according to its filing with Securities & Exchange Commission Monday. The company will sell an additional 169 million new shares should a so-called greenshoe option be exercised in full, the filing said.

SCG Packaging’s initial share sale is set to be Thailand’s second largest this year after Central Retail Corp.’s $2.5 billion offering in February. King Maha Vajiralongkorn is the biggest shareholder of its parent Siam Cement with 33.64% stake, according to the company’s website.

Asian IPOs sprung back to life following a slowdown amid the coronavirus outbreak, with a flurry of new listings in Hong Kong and China and reviving activity in India amid abundant liquidity following a lull triggered by the novel coronavirus pandemic. SCG Packaging’s IPO was approved in May but the company later had said it was unsure about the timing amid the spread of the virus.

“The packaging business has become a crown jewel of Siam Cement with the explosive growth of e-commerce and food-delivery demand amid the pandemic,” said Tawatchai Asawapornchai, deputy managing director at ASL Securities Co. “The company may view the window of opportunity as small with no ending of the coronavirus outbreak any time soon.”

SCG Packaging has already allocated 677 million new shares, or 60% of the offering, to 18 local and foreign funds as cornerstone investors, the filing showed. Kasikorn Asset Management Co. and BBL Asset Management Co. are the biggest buyers among 14 domestic institutions, while Avanda Investment Management Pte and NTAsian Discovery Master Fund are among the largest international investors.

The company plans to use proceeds from the offering to fund business expansion and new acquisitions as well as debt repayment, according to its filing. Its net income in the first half of this year jumped 40% to 3.64 billion baht, while total sales climbed 11% to 45.9 billion baht.

Shares will be offered to domestic and foreign investors from Sept. 28 to Oct. 14, according to the filing. The company will announce the final pricing on Oct. 8.

SCB Securities Co. and Bualuang Securities Co. are the lead arrangers for the domestic offering, while Morgan Stanley and UBS Group AG is managing the international sales.

(Adds analyst comment in fifth paragraph, offering details from sixth.)

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