VGI & U City Investment Unlocks Value for JMART Group, Accelerating Growth Up the J Curve

JMART Group welcomes VGI and U City, members of BTS Group as long term strategic partners. The strategic partnership will unlock value creation, through stronger capital and synergy realization, accelerating Jmart Group’s growth up the J curve.

VGI and U City, key members of BTS Group’s 3M (Move, Mix and Match) network, will invest a combined THB 17.5bn, in a powerful endorsement of JMART Group.  U City, repositioned to become BTS Group’s financial arm, will invest THB 7.2bn to hold 24.9% of SINGER and separately, U City and VGI will jointly invest THB 10.4bn to hold 9.9% and 15% of JMART respectively.  Completion of the deal remains subject to Jmart and SINGER shareholders’ approval

All the investment will be for new shares, to be issued via Rights Offerings (RO) and Private Placement (PP) across Jmart, SINGER, and JMT Network Services (JMT) delivering a powerful capital injection, which will be used to fuel an accelerated growth.

SINGER will receive up to THB 10.6bn from its PO and RO, to expand a growing base of the hire purchase loan portfolio and the vehicle title loan, as well as repay debentures and lower interest costs.  SINGER aims to have a loan portfolio of 15 billion baht in 2022.  JMT has also announced an RO capital increase (including free warrants for those who subscribe for newly issued shares), raising funds of more than 10 billion baht.  This will deliver capital to acquire non-performing loans (NPL), as JMT pushes to be the number one distressed asset management company in the country.

Mr. Adisak Sukumvitaya, Chief Executive Officer of Jaymart Public Company Limited, the Investment Holding Company, said “that VGI and U City, companies of the BTS Group, have joined JMART Group this time, is significant boost for JMART Group and reflects their trust in us. We are now backed by a group which has leading capabilities across advertising media, O2O solutions, logistics, data and customer reach.  This partnership will unlock financial upside and transform our growth potential through synergies. Over the next 3-5 years, this additional capital can support business expansion, and lower financial costs. Even under the COVID situation, we can be confident that JMART has adequate funding sources and efficiently allocates investment to create growth. At present, the total Group market capitalization is over 106 billion baht, and I expect it to grow no less than three times more.

In addition to providing the businesses with more opportunities to grow, this capital increase will strengthen the JMART Group’s capital, resulting in a stronger balance sheet. There is also a chance that credit ratings will improve.  It is expected that lower financing costs to SINGER and JMT will allow JMART’s to grow profits by at least 50% per year in the next 3 years.  This forecast excludes any additional impact from new business synergies with VGI and U City and BTS Group’s 3M network.”

Mr. Kavin Kanjanapas, Chief Executive Officer of BTS Group elaborated “We are very excited to enter into this partnership, which is a key MATCH partnership deal for us.  VGI and U City’s combined investment of 17.5 billion baht is a long term commitment and will unlock great mutual value for our respective Group’s, leveraging off our 3M network, our partners fintech capability and our aggregated branch and distribution capacity.  We also plan to incorporate their financial technology and Crypto Digital Token to be used in the BTS Group’s ecosystem, which will create a new experience and convenience for our customer base.”

For the synergy plan in the future, we expect to see an expansion of JMART’s customer base, products and services across the retail, finance, insurance, and technology businesses from VGI’s Online-to-Offline (O2O) solutions across advertising, payment and logistics business.

Jaymart Mobile will be capable of providing a variety of technology products via the powerful VGI platform and the addition of service points on the BTS station. Including the use of advertising media networks and transportation of companies in the VGI group, while VGI is able to expand its electronic appliance distribution channel (under its Fanslink investment) through more Jay Mart retail spaces.

SINGER is still the number one to reach customers through sales agents that cover the country in terms of distribution channels. Currently, there are more than 2,800 branches and franchises. Besides, technology products shops, JAYMART MOBILE, and affiliates are the strong distribution network and access to consumers. Combined with KERRY, it increases the opportunity to expand the logistics business in the JMART group more rapidly.  

Furthermore, financial technology, Blockchain, including the study of the Digital Token and the use of JFIN Token on the BTS ecosystem, is an opportunity to build a fully integrated JMART ecosystem in various transactions, instead of cash, to create a fully integrated business ecosystem and adapt to a fully digital organization, including jigsaw puzzles in combination with the most comprehensive Big Data analytics.