Sharp drop for JMART and JMT shares after capital increase and debenture issuing announced

Jay Mart PCL (JMART) reported on Thursday that it approved a registered capital increase at the amount of 362.64 million baht to 1,470.72 million baht by issuing 362.64 million ordinary shares at the par value of 1.00 baht.

The capital increase will be offered to existing shareholders under the general mandate in proportion to their shareholding not exceeding 271.98 million shares or 30 per cent and private placement (PP) for no more than 90.66 million shares or 10 per cent.

The company stated in the report in the Stock Exchange of Thailand (SET) that it shall entirely disregard the fraction from the subscription of newly issued shares calculation.

The Jay Mart director Yuvadee Pong-Acha said that the capital increase will increase the flexibility in fundraising and enable the company to invest or expand its business in the future. 

As a result of the capital increase, the company will have a stronger and more stable financial structure and can provide a general return to shareholders in the long term, she added.

The company also approved the issuance and offering of debenture of fewer than 3,000 million baht under a 20-year duration and interest rate depending on the market at the offering time.

The objective of the debenture offering is for the debt repayment and to be used as working capital for its business expansion, according to the report. 

JMT

JMT Network Services is one of JMART’s subsidiaries which includes JAYMART MOBILE, SINGER, JAS ASSET, Beans and Brown, J Fintech and J Ventures.

With the same move, JMT issued a capital increase of 464.31 million shares, divided into 107 million shares for the warrant JMT-W3, JMT-W2 and JMT-ESOPW1 and another 356.60 million shares as a general mandate by Right Offering (RO) and Private Placement (PO). 

Both the capital increase and debenture issuing will be held for approval at the Extraordinary General Meeting Shareholder on November 2, 2020.

Analysts from KGI securities said that JMART and its subsidiary JMT still maintained ‘Outperform’ in the market given that the company may face more risk from slower debt collecting. 

The risks for the company are the shares and earnings dilution from warrant conversion, said KGI analysts.

JMART has a combined asset value of 12,693 million baht which is expected to increase to 25,000 million baht at the end of 2020. 

The company also gained a 17 per cent year-on-year growth from the second quarter where most businesses were facing a downturn.

JMART shares dropped 10.39 per cent on Friday morning trade at 11:55 a.m. to 13.80 baht per share, a decrease of 1.80 baht, with a transaction value of 1,417.8 million baht 

Meanwhile, JMT shares also dropped 7.75 per cent to 29.75 baht per share, down 2.50 baht with the transaction value of 1,124.4 million baht. 

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