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Thai Union Raises USD 6.6 Million In Capital By Issuing Shares Thailand, March 8, 12

Thai Union Frozen Products Plc (TUF), the maker of canned and frozen seafood, Tuesday approved a rise in registered capital from 999.18 million baht (USD 32,7 million) to 1.2 billion (USD 39,3 million) via an issue of new ordinary shares.
According to a release, 199.9 million of the new shares will be offered via a rights issue at a ratio of one new share for every five held, at 50 baht each.
The remaining new shares will be reserved for the exercise of convertible bonds at 50 baht each, at the ratio of five existing shares for one newly issued ordinary share.
The move still requires shareholder approval at a meeting set for April 10.
TUF plans to use the proceeds of the capital increase to partially repay outstanding loans, shore up working capital and invest in future business expansion.
“Although we are comfortable with the current financial position, we believe it is advantageous to prepare ourselves for any future growth opportunity that might require additional financing,” said president Thiraphong Chansiri.
“We also believe it is prudent to minimize our risk exposure in light of the current chaos in the financial markets across the world.”
At the end of 2011, TUF’s net debt-to-equity ratio stood at 1.44.
Mr. Thiraphong said that while TUF believes it can gradually reduce this ratio without new capital from shareholders, it will take approximately two years to achieve the target ratio of 1.0.
The expected new equity capital (about 10 billion baht if fully subscribed) should immediately improve the company’s financial position, he said.
Nonetheless, TUF shares on the SET dived Tuesday after the announcement, closing at 65 baht, down four baht, in trade worth 916.22 million baht.