TWZ Repurchases 850M Shares to Raise ฿291M for the Investment in Waste Power Plant

TWZ Corporation Public Company Limited (TWZ) has announced the approval  of share repurchase for financial management purpose in the maximum amount not exceeding Baht 120 Million or equal to the number of shares repurchased not exceeding 850 million share par value at 0.10 baht per share and the number of the share to be repurchased is approximately 9.94% of the total issued shares. The purchasing will be processed through the Stock Exchange of Thailand. The repurchase period covers the duration of 14 days, starting from June 6, 2019 to June 26, 2019.
Moreover, TWZ’s Board of director has also approved and agreed a subsidiary company is Gear 2 Corporation Company Limited (GEAR 2) to purchase ordinary shares in Mitra Corporation Company Limited (MITRA) in the amount of 1,368,304 shares with a par value of Baht 100 per share, representing 52.63% of the paid-up shares from Sutee Holding Company Limited. The investment in MITRA has a total investment value of Baht 291 million.
MITRA which operates the shareholding business both directly and indirectly in PG&C 5714 Company Limited (PGC) in the proportion of 99% which operates the PG&C 5714 project, the power plant from industrial waste fuel located at Saha Rattana Nakorn Industrial Estate, Ayutthaya Province that is plasma power plant, gasification in burning and producing electricity with total electricity production capacity of 3 MW and can eliminate up to 60 tons of waste per day, and can expand the business to be an industrial waste disposal facility, purchase special electricity from industrial waste in the form of Feed-in Tariff (FiT)” and 99% shareholding in Tang Corporation Company Limited (TC) as well, to operate the waste separation plant. And the RDF plant that operates the business to convert waste into recycled materials and RDF fuel located at Uthai District, Ayutthaya 3 Province. It can eliminate industrial waste and community waste by sorting and converting.

As the TWZ raised funds from the shareholders and received the capital increase total of Baht 274.784 with the objective of increasing capital to fund future business expansion which is the investment in such industrial waste power plant project.
Future projects will bring more revenue and result in better performance of the Company which is most beneficial to the Company and its shareholders. However, due to the money received from the capital increase is lower than expected causing the company to have no funds for the power plant project as targeted.
Therefore, TWZ has to sell the investment in Gear2 which has a smaller investment size to expand investment in businesses that have more investment size and can expand in business and there is separate waste business, that if there is good operation, it can increase the potential of more income in the future. Therefore, TWZ has to consider choosing to invest only in projects that will generate highest benefits or returns for the Company from limited funds.
From the results of study of such businesses, including feasibility studies, legal, as well as negotiations with Seller, 14 making TWZ received various conditions suitable to invest so TWZ proposed to the Board of Directors for consideration.

The Board of Directors considered and approved the Company to purchase ordinary shares in Mitra Corporation Limited (“MITRA”) in the proportion of 52.63% of paid-up shares. The Board of Directors agreed that the Company’s share price in such circumstances is appropriate which still has higher rate of return than other projects with return on equity of 10.44%. The Board considered that the rate of return was high compared to the low risk because the power plant project has an agreement to sell electricity for sure and waste separation project that is a continuous business and have contract with third party to buy garbage causing less risk than other projects. Therefore, such prices are suitable for investment.